Legumex Walker puts sale, merger options on table

Pulse, canola and special-crop processing firm Legumex Walker has declared itself open to “strategic alternatives” for its future, including a sale or merger.

The publicly-traded Winnipeg company said Monday its board of directors has set up a review committee to “identify and consider strategic and financial alternatives… with the ultimate goal of maximizing shareholder value.”

Such possibilities, the company said, could include “strategic financing” from outside investors, a “business combination” such as a merger, or the sale of the company, whole or in parts.

Legumex said its board and management believe the value of its shares (TSX:LWP) has “not been reflective of the fundamental value inherent in the company” — and that such a review is timely given its recent “strategic shift to the high-value specialty food ingredient market.”

Legumex shares by Monday afternoon had jumped about 40 cents from Friday, peaking at $3.21 then settling slightly to $3.12.

That “strategic shift” has included expanding its high-oleic Omega-9 canola oil program with Dow AgroSciences Canada, and its non-GMO canola oil and meal programs with Scoular Co., CEO Joel Horn said in a release.

The review follows expressions of interest from “a number of qualified parties,” Legumex chairman Bruce Scherr, who will chair the review committee, said in the same release.

Those parties, he said, “are interested in exploring various transactions with us in certain of our markets, including the specialty food ingredient market, and we expect that this process will unlock (Legumex’s) value and allow the company to fully capitalize on these opportunities.”

Further “higher-margin” products from canola and special crops are involved in Legumex’s talks with potential partners, Horn said.

“No certainty”

Formed in 2011 as a merger of Saskatchewan’s Walker Seeds with Manitoba’s Roy Legumex, the company’s assets today include 12 crop processing and packing plants in Manitoba, Saskatchewan and Minnesota and two in China, plus receiving stations in Manitoba, North Dakota and Minnesota.

It also holds an 84 per cent stake in Pacific Coast Canola, a U.S. cold-press canola processing facility at Warden, Wash., which opened in 2013 with crush capacity for over 350,000 tonnes of canola seed per year.

Legumex, in its release, stressed there’s still “no certainty” any deal, merger or takeover will come out of the review process, and no decision on any option has yet been reached. It also said the committee hasn’t set a “definitive schedule” to complete its review.

Robert Buetel, president of Toronto investment holding company Oakwest Corp., and Marty Thrasher, president of London, Ont.-based advisory firm FMT Consulting, have both resigned from Legumex’s board, the company said Monday.

Legumex on Monday also announced a promotion for its corporate controller, Rosemary Brisson, to chief financial officer.

Brisson replaces CWB director and ex-Viterra CFO David Carefoot, who left Legumex in November to become CFO for Winnipeg-based retail chain Princess Auto. — AGCanada.com Network