INDIA – Ag Growth International Inc. (AGI), the Canadian engineering and manufacturing solutions provider has completed the acquisition of Milltec Machinery Ltd for US$82 million (CAD 109.5 million).
Headquartered in Bangalore, India, Milltec is a manufacturer of rice milling and processing equipment in India.
In addition to the purchase price, AGI has the potential for up to an additional C$38.4 million (US$28.76 million) based on the achievement of EBITDA targets, according to a World Grain report.
The acquisition will enable AGI, which majorly deals with grain handling, storage, and conditioning equipment to move into rice processing with a complete product line.
It further complements AGI’s existing product offerings and provides a strategic platform for further consolidation, especially in India.
“The acquisition of Milltec marks an important step for AGI as we expand into rice equipment and enter the large, and rapidly growing, markets in India,” said Tim Close, president and chief executive officer of AGI.
“Milltec now forms the foundation of our platform in India as we build a footprint to deliver our complete 5-6-7 strategy.
India is one of the world’s largest producers and consumers of all agriculture products and will invest heavily in the infrastructure required to facilitate the daily lives of over a billion people.
Milltec joins AGI at an inflection point in its journey from a small regional company to a Pan-India business.
We will invest and collaborate to accelerate this journey. The founders of Milltec, and a very talented team, are joining AGI in the pursuit of our goal to supply the world’s food infrastructure.”
According to the company, the deal provides it with several opportunities for sales, operational and supply chain synergies, including the service and support of AGI’s current product lines through Milltec’s Pan-India distribution platform.
Milltec’s equipment offerings include pre-cleaners, boilers, parboilers and dryers plus milling equipments.
It offers end of line equipment portfolio includes color sorters, packaging equipment with a capacity range of 10 to 75 kilograms, in addition to end-to-end turnkey solutions for rice processing activities.
It also has expanded its product portfolio to include pulse, seed, maize and wheat processing equipment as well as ancillary products, including silica extraction and co-generation plants.
Earlier this month, AGI acquired the US based grain storage management solution provider, IntelliFarms LLC.
In year ended Dec. 31, AGI saw record levels of trade sales and earnings, recording an EBITDA of C$148.2 million (US$111 million) for 2018.