Winnipeg, MB, November 30, 2015 – Ag Growth International Inc. (TSX: AFN) (“AGI” or the “Company”) today announced the acquisition of GJ Vis Enterprises Inc. (“Vis”). Winnipeg-based Vis is a manufacturer of material handling equipment used in the fertilizer, feed and grain sectors. Vis provides AGI with new capability and experience in the planning, design and manufacture of high throughput industrial fertilizer handling equipment. The purchase price of $15 million represents a valuation of approximately 4.5 times Vis’ trailing twelve month normalized EBITDA, with $10 million payable upon closing of the transaction and $5 million payable over two years based on the achievement of EBITDA targets. The amount payable upon close will be funded from AGI’s cash balance.
“We are very pleased to welcome the entire Vis team to the AGI family of companies,” said Tim Close, President of AGI. “Vis marks our entry into providing equipment and services for the commercial fertilizer and feed infrastructure in Western Canada. This acquisition is a natural extension of our current product catalogue and capabilities and our first significant move to capture additional revenue synergies from our smooth wall bin product line that we acquired with Westeel earlier this year. George and Jim Vis join our AGI Commercial Division as Vice Presidents to continue delivering leading solutions and products to their existing customers as well as to work closely with the other AGI Commercial divisions. We look forward to working with the Vis team to expand their business within Canada and into international markets.”
Ag Growth International Inc. is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. AGI has manufacturing facilities in Canada, the United States, Italy, the United Kingdom and Finland, and distributes its products globally.
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References to “normalized EBITDA” are to the unaudited earnings before income taxes, finance costs, depreciation and amortization of Vis and include a normalization adjustment for Vis’ owner/manager compensation structure. A non-IFRS financial measure is a numerical measure of a company's historical performance, financial position or cash flow that excludes (includes) amounts, or is subject to adjustments that have the effect of excluding (including) amounts, that are included (excluded) in the most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar businesses. We use these non-IFRS financial measures in addition to, and in conjunction with, results presented in accordance with IFRS. These non-IFRS financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our IFRS results and the accompanying reconciliations to corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting our business. Management uses the non-IFRS adjusted financial results and non-IFRS financial measures to measure and evaluate the performance of the business and when discussing results with the Board of Directors, analysts, investors, banks and other interested parties. Management cautions investors that normalized EBITDA should not replace profit or loss as indicators of performance, or cash flows from operating, investing, and financing activities as a measure of the Company’s liquidity and cash flows.
This press release contains forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as “anticipate”, “believe”, “continue”, “could”, “expect”, “intend”, “plan”, “will” or similar expressions suggesting future conditions or events. In particular, the forward looking statements in this press release include statements relating to our business and strategy, including our outlook for the financial and operating performance of AGI [and Vis].. Such forward-looking statements reflect our current beliefs and are based on information currently available to us, including certain key expectations and assumptions concerning anticipated grain production in our market areas, financial performance, business prospects, strategies, product pricing, regulatory developments, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, currency exchange rates and the cost of materials, labour, services,AGI's ability to achieve the expected benefits of the acquisition of Vis, and the anticipated impact of the acquisition of Vis on AGI's business. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including changes in international, national and local business conditions, weather patterns, crop planting, crop yields, crop conditions, the timing of harvest and conditions during harvest, seasonality, industry cyclicality, volatility of production costs, agricultural commodity prices, the cost and availability of capital, currency exchange rates, competition the failure to realize some or all of the anticipated benefits of the acquisition of Vis. These risks and uncertainties are described under “Risks and Uncertainties” in our most recently filed MD&A and Annual Information Form. These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. We cannot assure readers that actual results will be consistent with these forward-looking statements and we undertake no obligation to update such statements except as expressly required by law.