A major canola crush plant that faced an unclear future just south of the Canada/U.S. border has a new owner in one of the States’ top agribusinesses.
Ag co-operative CHS Inc. last week sealed its deal to buy Northstar Agri Industries at Hallock, Minnesota, about 40 km southeast of Manitoba’s main U.S. border crossing at Emerson.
The Northstar plant, which has capacity to process over 360,000 tonnes of canola per year into canola oil and meal, was majority-owned by California-based Pico Holdings.
As per the deal announced earlier in July, CHS will pay $127 million for the Northstar operation, minus an “estimated target working capital adjustment” and repayment of about $75 million in debt connected to the Northstar assets, for estimated net gain to Pico of about $30 million (all figures US$).
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The deal “expands our oilseed processing platform to include canola in addition to soybeans, adds to CHS presence in Canada (and) expands CHS oil product offerings to global food companies,” Tom Malecha, CHS’s vice-president for processing and food ingredients, said last week in a release.
Owning Northstar, he said, also links growers buying canola seed from CHS-owned retail outlets into an “integrated supply chain.”
“The new ownership structure adds security and many value-added opportunities for canola growers in our region,” Northstar president Neil Juhnke said in the same release.
The Hallock plant will be rebranded as CHS and its 57 employees will become CHS staff, the co-op said.
Set up in 2012, Northstar was billed as Minnesota’s first canola processing plant with an integrated refinery.
The sale to CHS follows Pico’s announcement in March that it would review its options for monetizing its investment in the Northstar business.
“We believe we have created significant value at Northstar,” Pico CEO John Hart said at the time, but the company also found Northstar “may have a higher valuation in the hands of a strategic buyer than as part of a diversified holding company.” — AGCanada.com Network
