Agrium Furthers U.S. Expansion; Acquires Southern States’ Retail Sites
Canada’s Agrium Inc. is further expanding its reach in the U.S. market. It has announced on behalf of its Crop Production Services Ag-retail business, that it has agreed to acquire 20 ag-retail locations across Georgia and Florida, and an integrated cotton ginning business in Statesboro, Georgia, from Southern States Cooperative.
Based in Richmond, Virginia, and owned by 200,000 farmer-members, Southern States Cooperative is a farm supply and services provider with retail sales that include crop nutrients, crop protection products, seeds, and agronomic and application services through 1,200 locations across 23 U.S. states.
The deal for the additional 20 sites across Georgia and Florida, along with the cotton ginning business is scheduled to close in September, and is expected to generate annual revenue in excess of $100 million for Agrium.
"Agrium remains focused on enhancing our retail distribution network in the U.S. and this acquisition will allow us to further capitalize on our existing presence in these regions," commented Agrium's President and CEO Chuck Magro, in a company statement.
This deal builds upon two previous deals in the U.S. ag-retail space by Agrium last year. In July 2016, Agrium agreed to acquire 18 ag-retail locations in Nebraska, South Dakota, Minnesota, Wisconsin, Michigan, and Indiana from Cargill, as Cargill continued to streamline its business focus.
At the time, Magro told Reuters that the company was targeting a 25 percent market share in the U.S. through either the construction or acquisition of additional ag-retail stores.
“This acquisition demonstrates our continued focus on growing our North American ag-retail business, particularly in the highly desirable U.S. Corn Belt,” said Magro. “The locations are in regions where we currently have a limited presence.”
This deal was quickly followed by another - the acquisition of 16 additional ag-retail locations across Western Canada from Andrukow Group Solutions.
“The acquired locations will increase our retail presence close to our manufacturing facilities in Western Canada, where we can optimize freight and handling, and in the U.S. Corn Belt, where we are under-represented in a key growing region,” said Magro at the time.
Foreshadowing more deals to come, Magro continued, “We remain committed to the strategy of growing our retail business through multiple growth levers, including acquisitions, where we have a full pipeline of opportunities.”
But that’s not all…
Last year was a benchmark year for Agrium that went beyond its plans for the expansion of its North American ag-retail business.
In August 2016 Agrium and Potash Corp. confirmed that the two companies were engaged in talks regarding a merger of equals that would create an agribusiness giant valued at more than C$30 billion.
By September of last year it was announced that terms have been agreed upon and the boards of both companies had approved the merger, which upon closing, created the world’s largest crop-nutrient supplier with a market value of about US$36 billion and expectations of annual operating synergies of US$500 million.
Under the terms of the deal, Potash shareholders own approximately 52 percent of the new company, newly named Nutrien, while Agrium shareholders hold the remaining 48 percent. And it is through Agrium’s growing North American retail network that Nutrien will be able to sell its line of potash, nitrogen, and phosphate-based nutrients directly to farmers.
"I look at the strategic fit and I look at combining the world’s largest fertilizer producer with the world’s largest ag-retailer," Magro told Bloomberg. "That makes an awful lot of sense to me."