AGI Announces Strategic Food Platform Acquisition

Winnipeg, MB, January 4, 2022 – Ag Growth International Inc. (“AGI” or the “Company”) (TSX: AFN) is pleased to announce that it has completed the acquisition of Eastern Fabricators (“Eastern”). Eastern specializes in the engineering, design, fabrication, and installation of high-quality stainless-steel equipment and systems for food processors. Eastern operates three facilities in Canada with two in Prince Edward Island and one in Ontario. Eastern serves a range of customers across North America and has developed strong relationships with some of the world’s largest multinational food processors. As of October 2021, on a trailing twelve-months basis, Eastern generated approximately $26M in revenue and $8M in adjusted EBITDA1.

“AGI Food has grown rapidly over the past several years as we brought together an outstanding team that delivers a unique combination of design, supply, and project management to food processors globally,” noted Tim Close, President & CEO of AGI. “Eastern builds on a solid foundation in our Food platform, bringing a very talented team along with market leading products, services, manufacturing capacity and, most importantly, customer relationships built on years of high-quality execution. This newly expanded team will drive strong revenue synergies as Eastern is integrated into the Food platform. We welcome the entire Eastern team to the AGI family and look forward to accelerating the growth of Eastern and our overall Food platform.”

Consideration for the transaction includes an upfront purchase price of $29.25M payable upon closing plus the potential for an additional $15.75M in earn-outs based on the achievement of financial targets in future years.

The transaction will be funded primarily through AGI’s senior debt facilities.

AGI Company Profile

AGI is a provider of solutions for global food infrastructure including seed, fertilizer, grain, feed, and food processing systems. AGI has manufacturing facilities in Canada, the United States, Brazil, India, France, and Italy and distributes its product globally.

For More Information Contact:

Andrew Jacklin
Director, Investor Relations





1 See “Non-IFRS measures”

Non-IFRS Measures

References to “adjusted EBITDA” are to the unaudited earnings of Eastern before income taxes, finance costs, depreciation, and amortization. Adjusted EBITDA is a non-standardized financial measure that is not calculated or presented in accordance with International Financial Reporting Standards ("IFRS"). Adjusted EBITDA includes normalizations related to the Canada Emergency Wage Subsidy program, revenue recognition, and foreign exchange, among others. Accordingly, it may not be possible to compare Eastern's adjusted EBITDA with adjusted EBITDA or other financial measures of other companies having the same or similar businesses including AGI. We use non-IFRS financial measures such as adjusted EBITDA in addition to, and in conjunction with, results presented in accordance with IFRS (or the accounting principles used to prepare Eastern’s financial statements) as we believe they reflect an additional way of viewing aspects of a company’s operations that may provide a more complete understanding of factors and trends affecting the company’s business. Investors are cautioned that adjusted EBITDA should not replace profit or loss as indicators of Eastern's performance, or cash flows from operating, investing, and financing activities as a measure of Eastern’s liquidity and cash flows. AGI's method of calculating Eastern's adjusted EBITDA may differ from the methods used by other issuers.

In addition, the financial information in this news release relating to Eastern’s revenue and adjusted EBITDA is derived from Eastern's financial statements, which are prepared in accordance with Canadian generally accepted accounting principles for private enterprises, which differ in some material respects from IFRS, and accordingly may not be comparable to the financial statements of AGI or other Canadian public companies.

Forward-looking Information

This press release contains forward-looking statements and information (collectively, "forward-looking information") within the meaning of applicable securities laws that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company and Eastern. All information and statements contained herein that are not clearly historical in nature constitute forward-looking information, and the words “anticipate”, “estimate”, “believe”, “continue”, “could”, “expects”, “intend”, “plans”, “will”, “may” or similar expressions suggesting future conditions or events or the negative of these terms are generally intended to identify forward-looking information. Forward-looking information involves known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. In addition, this press release may contain forward-looking information attributed to third party industry sources. Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which it is based will occur. In particular, the forward-looking information in this press release includes information relating to our business and strategy, including with respect to our ability to achieve the expected benefits of the acquisition of Eastern and the contribution therefrom including our expectations that the newly expanded Food platform team will drive strong revenue synergies as Eastern is integrated into our Food platform and that Eastern and our overall Food platform will continue to grow and at an accelerated pace. Such forward-looking information reflects our current beliefs and is based on information currently available to us, including certain key expectations and assumptions concerning: the anticipated impacts of the COVID-19 pandemic on our business, operations and financial results; future debt levels; anticipated grain production in our market areas; financial performance; the financial and operating attributes of Eastern and the anticipated future performance thereof and contributions therefrom; business prospects; strategies; product and input pricing; regulatory developments; tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; political events; currency exchange and interest rates; the cost of materials; labour and services; the value of businesses and assets and liabilities assumed pursuant to the Eastern acquisition; the impact of competition; the general stability of the economic and regulatory environment in which the Company and Eastern operate; the timely receipt of any required regulatory and third party approvals; the ability of the 3


Company to obtain and retain qualified staff and services in a timely and cost efficient manner; the timing and payment of dividends; the ability of the Company to obtain financing on acceptable terms; the regulatory framework in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its products and services. Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking information, including the effects of global outbreaks of pandemics or contagious diseases or the fear of such outbreaks, such as the recent COVID-19 pandemic, including the effects on the Company's operations, personnel, and supply chain, the demand for its products and services, its ability to expand and produce in new geographic markets or the timing of such expansion efforts, and on overall economic conditions and customer confidence and spending levels, changes in international, national and local macroeconomic and business conditions, as well as sociopolitical conditions in certain local or regional markets, weather patterns, crop planting, crop yields, crop conditions, the timing of harvest and conditions during harvest, the ability of management to execute the Company’s business plan, seasonality, industry cyclicality, volatility of production costs, agricultural commodity prices, the cost and availability of capital, currency exchange and interest rates, the availability of credit for customers, competition, AGI’s failure to achieve the expected benefits of the Eastern acquisition including to realize anticipated synergies; changes in trade relations between the countries in which the Company does business including between Canada and the United States; cyber security risks; the risk that the assumptions and estimates underlying the provision for remediation related thereto and insurance coverage for the Incident will prove to be incorrect as further information becomes available to the Company; and the risk of litigation in respect of equipment or work previously supplied or completed or in respect of other matters and the risk that AGI incurs material liabilities in connection with such litigation that are not covered by insurance in whole or in part. These risks and uncertainties are described under “Risks and Uncertainties” in our most recently filed MD&A and Annual Information Form, all of which are available under the Company's profile on SEDAR ( These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking information. We cannot assure readers that actual results will be consistent with this forward-looking information. Readers are further cautioned that the preparation of financial statements in accordance with IFRS and Canadian generally accepted accounting principles for private enterprises requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. These estimates may change, having either a negative or positive effect on profit, as further information becomes available and as the economic environment changes. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information included in this press release is made as of the date of this press release and AGI undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.