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Ceres Global has option to buy Delmar Commodities
Posted on Tuesday, 09 July 2019 06:21
Ceres Global Ag has announced it has an exclusive option to pick up Delmar Commodities, the Canadian agricultural processing and supply chain player.
Completion of a deal would be subject to a definitive agreement being reached, as well as due diligence being carried out, and is expected to follow on or around 1st August.
Under the terms of the option which Ceres holds, the buyer will be able to purchase all issued and outstanding shares in the target for a cash consideration of CAD 16.00 million, while assuming debts totalling CAD 7.60 million.
Due diligence commenced in February 2019.
Following closing, Delmar’s operations and staff, which number 55, would be strategically integrated into its new owner’s overall operational network.
Commenting on the proposed deal, Ceres chief executive Robert Day said: "We believe the addition of Delmar's grain assets to be an important first step in adding strategic origination for our core products, while also significantly advancing our portfolio diversification strategy with the inclusion of their soybean crush, agricultural seed sales & distribution and birdfeed product lines."
However, the buyer has cautioned that there is no guarantee of a deal going ahead on the terms outlined, or indeed at all.
Delmar’s operations are spread across four primary business lines: grain merchandising, soybean crush, birdfeed production and sales.
The company was founded in 1996 and now works from seven locations across Manitoba.
According to Zephyr, the M&A database published by Bureau van Dijk, 52 deals worth a combined USD 913 million targeting oilseed and grain farming companies have been announced worldwide since the beginning of 2019, compared to the 120 worth USD 4.56 billion signed off last year.
The largest of this year to date is worth USD 214.82 million and saw First Resources and Subur Arummakmur invest in Indonesia-headquartered Borneo Ketapang Permai.
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