Delmar Commodities is set to be sold to Ceres Global Ag, an integrated commodity group with operations throughout North America.
The Winkler, Man. grain, oilseed and processing firm was founded by Martin Harder in 1995 from castoff elevators during the grain sector’s consolidation push at the time.
Harder left the firm in 2010, selling his shares to an ownership group consisting of five key employees and the Keystone Grain Group.
Minnesota-based Ceres said Monday has secured an “exclusive option” to acquire the company and plans to close a deal by Aug. 1, pending due diligence.
Under the option agreement, Ceres has the right, through July 31, to purchase all of Delmar’s issued and outstanding shares for $16 million in cash paid to Delmar’s shareholders, and the assumption of about $7.6 million in existing term debt.
Delmar would operate as a subsidiary of Ceres, with Delmar’s operations and approximately 55 employees “strategically integrated into Ceres’ overall operational network” according to a media release announcing the deal.
Ceres CEO Robert Day said Delmar’s grain assets, soybean crush capacity and other business activities make them a good fit for his company.
Ceres’ other Canadian assets include a grain elevator on the Welland Canal at Port Colborne, Ont. and a Prairie export terminal on the U.S. border at Northgate, Sask., southeast of Estevan.
“We see significant value in Delmar’s capabilities, market knowledge and customer relationships, but perhaps the most attractive aspect of Delmar is its people and their talent.” Day said.
Delmar president Dale Heide said the Manitoba firm is excited to join a larger business which opens the door to new opportunities.
“Delmar’s growth ambitions and plans, combined with Ceres’ customer network and access to capital, would provide us with a unique opportunity to profitably grow together,” Heide said. — Glacier FarmMedia Network