An Alberta farmer-owned grain handler has expanded its holdings into western Saskatchewan by buying an elevator it already operated on local farmers’ behalf.
Providence Grain Group on Tuesday announced it has taken up 97.3 per cent of the shares in Meridian Grain Corp. for purchase through a share swap with that company’s stakeholders.
The deal had the support of the board of directors at Meridian, which operates a 12,000-tonne capacity grain handling facility at Marengo, Sask., about 45 km west of Kindersley.
Formed in 2002, Meridian contracted the Marengo elevator’s operation out to Winnipeg-based Paterson Grain until May last year, when it approached Providence to operate the facility.
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
Providence, which operates in Alberta as Providence Grain Solutions, already owns high-throughput grain elevators at Gaudin and Viking, a wooden crib elevator at Crossfield, a crop input centre at Waskatenau, and a joint-venture stake in a crop input centre at Mundare.
Formed in 2002 by mainly farmer shareholders and based at Fort Saskatchewan, Alta., Providence launched its offer to buy Meridian in February this year.
With Meridian’s owners now holding shares in Providence, the parent company has about 300 mainly farmer shareholders, according to Providence CEO Milt Miller.
"This acquisition will add significantly to Providence’s growth strategy," Miller said in a release Tuesday, adding in an interview that the company has no qualms about possible further expansion outside Alberta.
Also, he said, "we’re working very hard at planning an expansion" of the Marengo facility.
Providence has previously said its acquisitions and organic growth allow it to manage risk and boost its competitiveness by being large enough to serve global grain trading firms.
Providence plans to take over the remaining 2.7 per cent of Meridian shares, held by estates and other parties, under Saskatchewan corporate law that allows for compulsory acquisitions after more than 90 per cent of a company’s shares accept an offer.
Under the share swap, which is now closed and won’t be extended, every 916 Meridian Class A shares were to be traded for one Class A Series 2 share in Providence.
