Viterra Inc. (TSX:VT) is selling its North American livestock feed operations, including a feed mill in Olds and a premix facility at Ponoka.
The Calgary-based company, which is Canada’s biggest grain handler and has operations around the world, announced on Wednesday that it is has struck a deal with Hi-Pro Feeds LP. Hi-Pro is a newly formed entity owned by Birch Hill Equity Partners and the existing management team of Viterra’s livestock feed business.
The assets included in the sale consist of six feed mills and one pre-mix manufacturing facility in Canada, and six feed mills and a commodity blending site in the United States.
Karl Gerrand, Viterra’s chief operating officer for processing, said the North American feed business was not material to Viterra’s overall results and the sale came after a strategic view of the company’s businesses.
“We look for areas in the market where we can have a strategic influence and have a leading position in the market,” said Gerrand.
“In areas where markets are very fragmented it is very difficult for us to have that kind of position.”
Viterra president and CEO Mayo Schmidt said the move will allow the company to focus on its key grain handling and processing businesses.
Gerrand pointed to the company’s oats and pasta businesses in North America as well as its malt business in Australia as areas where it might look to expand further.
“We are pleased that Hi-Pro intends to maintain continuity for the staff and customers of the livestock feed business going forward,” said Schmidt.
Daren Kennett, CEO of Hi-Pro, confirmed that the same services and products will be offered, with the existing staff.
Financial terms of the sale were not disclosed. It’s expected to close during Viterra’s second fiscal quarter, but is subject to regulatory approvals and other conditions.
Viterra was formed by the merger of the Saskatchewan Wheat Pool and Agricore United. The company also sells fuel, fertilizers and other products to the agricultural sector.
Shares in the company closed down 16 cents at $10.09 on the Toronto Stock Exchange on Wednesday.