FOR IMMEDIATE RELEASE
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AGI Announces Completion of Westeel Acquisition
Winnipeg, MB, May 20, 2015 – Ag Growth International Inc. (“AGI”) (TSX: AFN) is pleased to announce that the previously disclosed arrangement to acquire the Westeel division of Vicwest Inc. (TSX: VIC) was completed today. Headquartered in Winnipeg, Manitoba, Westeel is Canada’s leading provider of grain storage solutions offering a wide range of on-farm and commercial products for the agricultural industry.
“The strategic acquisition of Canada's leading brand in grain storage further establishes AGI as a global leader in grain handling and storage solutions,” said Gary Anderson, AGI’s Chief Executive Officer. “AGI and Westeel share a deep commitment to product quality and customer service and combined we create a Canadian-based global agricultural leader with a long history of serving the needs of our customers. Westeel’s complementary product offering expands our growth platform within North America and around the world and we look forward with enthusiasm to bringing this outstanding company into the AGI family.”
“AGI places the highest value on the contributions of its employees and we look forward to meeting and welcoming all of the people at Westeel,” said Tim Close, President of AGI. “We are very excited to get to work on growing Westeel along with AGI and realizing upon the enormous potential of the combination of these great companies.”
Management believes the acquisition of Westeel provides significant SG&A, sales and manufacturing synergies with estimated near-term synergies of $5 million per annum.
AGI is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, chain conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom and Finland and distributes its product globally.
Further information can be found in the disclosure documents filed by AGI with the securities regulatory authorities, available at www.sedar.com and on AGI's website www.aggrowth.com.
This press release refers to "adjusted EBITDA" of AGI, Westeel and AGI pro forma the acquisition of Westeel for the year ended December 31, 2014, which is profit before income taxes, finance costs, depreciation, amortization, impairment charges related to goodwill, intangibles or available for sale assets, changes in the fair value of embedded derivatives, gains or losses on foreign exchange, gains or losses on the sale of property, plant & equipment, non-cash share based compensation expenses and expenses related to corporate acquisition activity and after excluding non-recurring income and expenses associated with Vicwest Inc.'s corporate support functions that were not transferred to AGI as part of the Westeel acquisition and incremental corporate supports costs AGI estimates will be required post-closing.
Adjusted EBITDA is not recognized under International Financial Reports Standards and does not have a standardized meaning. Accordingly, it may not be possible to compare it with similar financial measures of other companies having the same or similar businesses as Westeel and AGI. In evaluating financial performance, management believes that adjusted EBITDA is a useful supplemental measure to profit or loss; however, management cautions potential investors that adjusted EBITDA should not replace profit or loss as an indicator of performance.
Pro forma financial Information
This press release refers to unaudited pro forma financial information for AGI for the year ended December 31, 2014, giving effect to, among other things, the Westeel acquisition, as if the Westeel acquisition had been completed as at January 1, 2014. Such unaudited pro forma financial information is not intended to be indicative of the results that would actually have occurred, or the results expected in future periods, had the events reflected therein occurred on the dates indicated. Any potential synergies that may be realized have been excluded from such unaudited pro forma financial information. There are limitations inherent in the very nature of pro forma data and undue reliance should not be placed on such unaudited pro forma financial information. The historical financial information relating to the Westeel business included in this press release may not reflect what the revenues and adjusted EBITDA of the Westeel business would have been had the Westeel business been a separate legal entity or had AGI owned the Westeel business during 2014, or what AGI's revenues or adjusted EBITDA will be in the future.
This press release contains forward-looking information within the meaning of applicable Canadian securities law ("forward-looking statements") Statements other than statements of historical fact contained in this press release may constitute forward-looking statements including, without limitation, management's expectations, projections, estimates, intentions and beliefs concerning anticipated future events, results, circumstances, economic performance or expectations with respect to AGI, including AGI's business operations, business strategy and financial condition. Forward-looking statements may include words such as "anticipates", "believes", "budgets", "could", "estimates", "expects", "goal", "intends", "may", "outlook", "plans", "strive", "target", "will", "should", "proposes", "predicts", "potential", "continue" or similar words. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to AGI's ability to achieve the expected benefits of the Westeel acquisition and the anticipated impact of the Westeel acquisition on AGI and its business.
The forward-looking statements contained herein reflect the internal projections, expectations, future growth, results of operations, performance, business prospects and opportunities of AGI and are based on information currently available to AGI. In developing these forward-looking statements, certain material assumptions were made that AGI believes are reasonable. Actual results and performance may differ materially from results and performance discussed in the forward-looking statements, as they are subject to a number of risks and uncertainties, including but not limited to: actual future market conditions being different than those anticipated by management; the failure to realize some or all of the anticipated benefits of the Westeel acquisition; and the other risks described in AGI's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com.
Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in forward-looking statements, include, but are not limited to: the view of management regarding current and anticipated market conditions; industry trends remaining unchanged; the financial and operating attributes of AGI and Westeel and the anticipated future performance of AGI and Westeel; assumptions regarding the interest rates under AGI's credit facilities; the extent to which the Westeel acquisition is accretive, which may be impacted by the realization and timing of synergies and the operating performance of AGI and Westeel; assumptions regarding non-recurring transaction and transition costs incurred by AGI in connection with the Westeel acquisition; assumptions regarding future general and administrative costs estimated to be incurred by AGI in connection with the management of the Westeel business by AGI; assumptions regarding value of the business and assets acquired and liabilities assumed pursuant to the Westeel acquisition; and the other factors and assumptions described herein and in AGI's annual information form and other reports on file with Canadian securities regulatory authorities.
There can be no assurance that any of the anticipated strategic benefits and operational, competitive and cost synergies of the Westeel acquisition will be realized.
Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although forward-looking statements contained in this press release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on such forward-looking statements and assumptions as management cannot provide assurance that actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, AGI. These forward-looking statements are subject to change as a result of new information, future events or other circumstances.
The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date hereof and AGI undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.