U.S. commodities firm Ceres Global Ag Corp. has exercised its option and closed its deal to buy Manitoba grain merchandising firm Delmar Commodities.
Ceres announced Friday it has completed the deal to buy all of Delmar’s shares for about $15.25 million in cash and assume about $7.6 million in existing term debt.
The Minneapolis firm said July 8 it had an exclusive option to buy Delmar and expected to close that deal on or around Aug. 1, having already started its due diligence work back in February.
Delmar’s operations in Manitoba include its Jordan Mills soybean crush plant near Roland and elevators at Roland, Somerset, Gladstone, Westbourne, Newdale and Beausejour. It’s also the exclusive seed corn and soybean distributor in Western Canada for U.S.-based Legend Seeds.
Winkler-based Delmar dates back to 1995, founded by Martin Harder from castoff elevators during grain industry consolidation at the time. Harder sold his shares in Delmar in 2010, to an ownership group of five key employees and the Keystone Grain Group.
The deal with Ceres calls for Delmar to operate as a subsidiary, with its operations and about 55 employees “strategically integrated” into Ceres’ network.
By buying Delmar, “we have made meaningful progress on our goal to diversify our product lines, add strategic origination capabilities for our core products, and expand our geographic footprint in Canada,” Ceres CEO Robert Day said in a release Friday.
Ceres’ footprint in Canadian grains already includes a terminal on the Welland Canal at Port Colborne, Ont.; a Prairie export terminal on the U.S. border at Northgate, Sask., southeast of Estevan; 25 per cent of Saskatchewan shortline Stewart Southern Railway; and a 17 per cent stake in Canterra Seeds.
Its U.S. grain operations include a Lake Superior terminal at Duluth, grain terminals at Minneapolis and Shakopee, Minn. and a joint venture with Consolidated Grain and Barge in a terminal at Savage, Minn. — Glacier FarmMedia NetworkTagged Canada, Ceres, Ceres Global Ag, crush, Delmar, Delmar Commodities, Jordan Mills, manitoba, Minnesota, option, soybean