Judge Shawn Smith of Court of Queen’s Bench in Saskatoon on Friday approved the sale of Morris to a numbered-company arm of Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing. The numbered company will operate as “Morris Equipment.”

The deal will see Morris’ Saskatoon head office, its Minnedosa, Man. manufacturing plant and its patents and related intellectual property go to Rite Way. The deal’s financial terms and dollar amounts are redacted in court documents posted online.

Rite Way and Morris’ court-appointed monitor have agreed to target a closing date of Dec. 31 for the deal.

In its report to the court on Dec. 11, Alvarez and Marsal, the monitor for Morris, described the deal as “the culmination of all of the efforts and resources expended by Morris Group and its stakeholders over the course of the last 12 months.”

If approved and completed, the monitor said, the deal “will preserve the core components of the 90-year-old farm equipment manufacturing enterprise carried on by Morris Group (and its predecessors) continuously from the 1920s until the present date.”

However, in its “exhaustive sale process” to find an investor or buyer for Morris, “no party had expressed to the monitor an intention to purchase, acquire or operate the Yorkton plant,” the monitor said.

The deal as reached means the Yorkton plant will close down when the deal is completed, officially putting the plant’s 20 remaining employees and another 50 laid-off employees out of work.

Without a letter of understanding, as was reached earlier this year between the company and the Yorkton plant’s union, the plant’s collective bargaining agreement would have required any buyer to “take on a degree of labour relations risk for their existing business operations” even if it didn’t buy the Yorkton facility.

The Yorkton plant’s workers, members of the Retail, Wholesale and Department Store Union Local 955, approved the terms of the letter in August in a vote at an open-air meeting at a Yorkton baseball diamond.

The exact contents of the letter were kept confidential in the monitor’s Dec. 11 report. It calls for creation of a fund to manage payments to Yorkton plant employees “whose employment is anticipated to be terminated.”

The importance of the letter of understanding to the deal “on which the survival of this business enterprise is based cannot be overstated,” Alvarez and Marsal wrote in its report.

BMO, which as Morris’ principal secured creditor is owed about $25 million, has said it supports the proposed sale but also now plans to file for an application-for-bankruptcy order against Morris Group, likely to be heard in court next month.

A bankruptcy would see the employment terminated for Morris’ Saskatoon and Minnedosa staff but, as the monitor’s report puts it, “reasonable prospects exist” for those staff to get employment with the new owner.

Operating in creditor protection since January this year, Morris’ businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Morris has operated a plant at Yorkton since 1949 and at Minnedosa since 1960, and went on to expand both plants several times. A company-owned dealership and service centre at Virden, Man. closed earlier this year.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

The post Court approves Morris Industries’ sale to Rite Way appeared first on Grainews.

Calgary consultancy Alvarez and Marsal, the court-appointed monitor for Morris, said Tuesday in its latest report to Court of Queen’s Bench in Saskatoon it recommends approval of a sale and vesting order, clearing the way for Morris’ sale to Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.

The report also recommends Morris’ creditor protection, which has been in place since Jan. 8 with several extensions and otherwise expires Friday, be extended again to Nov. 30.

Alvarez and Marsal said it expects the “transactions contemplated” in the proposed deal to close on or before Nov. 15, and has “continued to work towards satisfying the remaining conditions” of asset purchase agreements (APAs) with SFSL for Morris.

The monitor said it believes it’s appropriate to seek a sale and vesting order now, since it’s working to address those outstanding conditions on or before Friday (Sept. 18). The APAs, it noted, have the approval of BMO, Morris’ largest secured creditor.

The APAs, Alvarez and Marsal said, “represent the highest and best offer received for the assets” of Morris, and a deal with Rite Way “would be more beneficial to (Morris’) creditors than a sale or disposition under a bankruptcy given the offers previously received.”

Remaining conditions for a deal include SFSL reaching an acceptable financing arrangement with its lender — and for Morris to negotiate an “acceptable arrangement” with the union representing employees at its Yorkton, Sask. manufacturing plant.

On the latter, Alvarez and Marsal said a letter of understanding between Morris and the Retail, Wholesale and Department Store Union Local 955 was drafted and submitted to union members. The membership then approved the terms of the letter on Aug. 26 in a vote at an open-air meeting at a Yorkton baseball diamond.

That letter proposes setting up a fund to manage payments to an unspecified number of Yorkton plant employees “whose employment is anticipated to be terminated” once the sale closes.

Further details weren’t available; the monitor has also asked Queen’s Bench to place the letter under confidential seal along with the proposed APAs.

Apart from its plant at Yorkton, Morris also has a plant at Minnedosa, Man. The Saskatoon-based company’s businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

The post Court approval sought for Morris Industries sale appeared first on Grainews.

Calgary consultancy Alvarez and Marsal said in a report Tuesday it received a letter of intent for a “proposed sale transaction” from Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.

Alvarez and Marsal, the court-appointed creditor protection monitor for Morris, said it had worked in “extensive negotiations” with SFSL — and with the support of BMO, Morris’ largest secured creditor — to execute the letter of intent last Friday.

Details of the Rite Way proposal aren’t available. An order, to be submitted for approval Friday at Court of Queen’s Bench in Saskatoon, has been drafted requiring that the letter of intent be sealed as confidential for now.

The draft order would also extend Saskatoon-based Morris’ creditor protection to July 3. The company has been in creditor protection since Jan. 8 and has since been granted three extensions, the most recent of which is due to expire Friday.

Alvarez and Marsal, in asking that the letter be sealed, said disclosing information about the Rite Way proposal “could potentially jeopardize the Monitor’s efforts to attract future offers” for Morris’ assets.

The monitor had got court approval on Jan. 16 for a “sales and investment solicitation process” for Morris — but it said in its May 6 report that the process hadn’t led to an “acceptable offer.” It then went back to talk to parties that had shown “continued willingness” for a deal.

Though the Rite Way letter of intent is non-binding, the monitor said it’s of the view that reaching a deal by June 19, with a target closing date of June 30, “appears to be achievable.”

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, the company’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs.

Saskatoon-based Morris, founded in 1929 as Morris Rod-Weeder, today has plants at Yorkton, Sask. and Minnedosa, Man., making air carts, drills, seeders, harrow bars and bale carriers.

The company was owned by the Morris family up until 2007 when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control of Morris in 2017.

Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

A company-owned sales and service centre at Virden, Man. was shut down in mid-March and some “redundant assets” of that business were sold to auctioneer Ritchie Bros. to be included in a March 31 sale.

Other assets and inventory from the Morris Sales and Service site at Virden are expected to either be sold or relocated to Morris Industries sites by the end of this month, Alvarez and Marsal said in its report. — Glacier FarmMedia Network

The post Rite Way proposes to buy Morris Industries appeared first on Grainews.

The Court of Queen’s Bench in Saskatoon on Wednesday approved the Morris Group’s Jan. 3 application, which stays any proceedings or actions against the company until Jan. 18 at the earliest.

Saskatoon-based Morris, founded in 1929 as Morris Rod-Weeder, today has plants at Yorkton, Sask. and Minnedosa, Man., and makes equipment including seeders, drills, air carts, packer harrow bars and bale carriers.

The company was owned by the Morris family up until 2007 when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control of Morris in 2017.

Morris’ secured creditors include BMO, Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

Morris, which sells through dealer networks in Canada, the U.S., Australia and Eastern Europe, pointed in its Jan. 3 application to “significant losses” in recent years due to “the unfortunate combination of multiple factors.”

Listed first among those factors were rising overhead and production costs from expanding the business and introducing both its proprietary new ShieldCore welding technology and, in 2018, a new product line, the Quantum Air Drill.

On its launch, the Quantum was a success for Morris in Canada and abroad, particularly in Australia, which typically accounts for about 30 per cent of the company’s sales, according to Morris chief operating officer Kevin Adair in a Jan. 3 affidavit.

However, the Quantum’s drill openers developed problems, which in North America were dealt with through an upgrade program. But in Australia — where the units come under more wear and tear due to heat, dryness and soil conditions and a longer growing season — the problems called for changes to the design and “complete replacement” of the drill openers.

Given that drill openers make up about 40 per cent of the air drill’s unit cost, the resulting warranty issues called for “a significant capital investment far beyond any foreseeable estimates,” the company said.

On top of the Quantum issues, China’s ban on Canadian canola seed imports and “inclement weather conditions in successive crop years” cut into Morris’ sales in Western Canada, while the 2018 tariff fight between the U.S. and Canada led to added raw material costs, Adair said.

Furthermore, he said, up against lower revenues and greater debt, the company in 2019 lost access to a “factoring” facility previously provided by National Bank of Canada.

Losing that credit facility — which previously allowed Morris to improve its cash flow through early access to insured receivables in Australia — keeps the company from getting at about $10.8 million in receivables until late April this year.

With limited demand for new machinery, Adair said, Morris is also faced with “significant inventory” of completed equipment, work in progress and raw materials. It also has “floor planning” arrangements with its dealers, in which the company takes on a portion of the dealerships’ carrying costs.

Morris started short-term cost-cutting in September 2019, including “partial shutdowns” at Yorkton and Minnedosa as well as salary cuts and work-share programs, he added.

As of now, he said, the company’s restructuring strategy may also include, among other options:

• consolidating manufacturing into a single plant and selling off other facilities and equipment;
• auctioning off “older-generation” products and shuffling inventory between dealerships to cut its floor-planning costs;
• relocating to a smaller head office and/or cutting head office and support staff positions;
• winding down a company-owned equipment dealership at Virden, Man.; and/or
• working with its secured creditors and its court-appointed monitor, Alvarez and Marsal Canada, on a “sale and investor solicitation process.”

As of Jan. 3, Adair said, the Morris Group has 134 employees, and “further reductions” to its workforce will be necessary.

However, he said, given “time and interim financing,” the company believes it can “weather the present difficulties” and rehire laid-off staff when production resumes. — Glacier FarmMedia Network

The post Ag equipment maker Morris in creditor protection appeared first on Grainews.

Morris on Tuesday announced its president, Ben Voss — a Saskatoon engineer and farmer, and one of the players in the new investment group — has also been named CEO, replacing Casey Davis.

Davis, who until now was also Morris’ majority shareholder, will remain a minority shareholder and a member of the company’s board of directors, moving to an “advisory” role.

Morris, founded by George Morris as Morris Rod-Weeder in 1929, is based in Saskatoon and also has manufacturing plants at Yorkton, Sask. and Minnedosa, Man. The company’s product lines today include air seeders, air carts, air drills, press drills, harrow bars and bale carriers.

Morris’ president since 2015, Voss came to the company from a stint as CEO for MLTC Resource Development, a private-equity partnership owned by the nine Meadow Lake First Nations in northwestern Saskatchewan. Voss also owns a fourth-generation grain farm at Spiritwood, Sask., about 150 km southeast of Meadow Lake.

Voss and Davis, Morris said, made a “joint decision” to transition majority ownership to the investor group, led by Voss and including Calgary investment firms Avrio Capital and Lamont Brown Group.

The sizes of the various players’ new investments in Morris weren’t disclosed Tuesday.

For Avrio, whose partners Aki Georgacacos and Steven Leakos also now join Morris’ board, the Morris stake is billed as one of its “largest investments to date.”

Avrio, in a separate release Tuesday, said its stake is part of a $20 million deployment it made across three companies, also including mushroom producer M2 and plant genetics firm Phytelligence. Of that amount, Avrio said it had committed $6 million to Phytelligence.

“We are delighted to have attracted Avrio to lead the recapitalization of our company,” Voss said in Avrio’s release, citing its “depth of food and agriculture expertise and track record.”

“With its strong market position and a renewed commitment to the company’s core values of innovation and service that has built the Morris legacy, we believe the opportunities to grow this business are limitless,” Leakos said in the same release.

Lamont Brown Group is billed as a “family office” set up by businessman Keith Brown, who launched Saskatchewan trailer manufacturer Trailtech and also operates a farmland investment company.

“(W)e are all together today launching the next generation of Morris,” Brown said Tuesday in Morris’ release, noting “we know Morris, Ben Voss and Avrio and we couldn’t be happier that all these ingredients are combined in this very exciting business opportunity.”

Morris on Tuesday billed the new investment overall as “a significant commitment to growth and re-investment in the company” and said it will be “undertaking an ambitious and exciting plan as a market leader, playing a key role in the future of farming around the world.”

“There are existing and evolving market opportunities that will continue to allow Morris to grow,” said Davis, who had been Morris’ CEO since 2001 and bought control of the company from Wendy Morris in 2007. — AGCanada.com Network

The post New investment leads to new chief at Morris appeared first on Grainews.

The funding support will be a co-investment with Morris to accelerate implementation of new manufacturing technology that will incorporate advanced features in their products and position the company to remain globally competitive, a federal release says.

The new technology is expected to result in a new generation of equipment that benefit farmers with longer product life cycles through increased durability and performance, the release says. This technology enables Morris to offer advanced technology to farmers around the world and expand the company’s global competitiveness.

Since 1929, Morris has developed and manufactured high-quality equipment and is recognized for farmer-inspired innovative technology and responsive customer support. Their products are sold extensively through Canada, the USA, and Europe, as well as Africa, Asia, Australia, and New Zealand.

WINN aims to bridge the gap identified in pre-commercialization funding for small- and medium-sized enterprises (SMEs), assisting them in the process of bringing their ideas to market-ready products, processes, and services.

Announced in October 2013, WINN will invest $100 million over 5 years in the form of repayable contributions to for-profit SMEs based in Western Canada.

Also announced Friday, Saskatchewan Trade and Export Partnership (STEP) will receive $700,000 through the Western Diversification Program (WDP) to rent trade show floor space at Agritechnica 2017 in Hanover, Germany, a federal release said.

Morris will showcase its new features in its products when it attends Agritechnica in November, along with more than 40 western Canadian agricultural equipment manufacturers, agricultural service companies, and technology companies.

Agritechnica, with an attendance of 450,000 visitors from over 75 countries, is the world’s most important trade show for western Canadian companies.

The post Morris Industries gets $3.4 million for manufacturing, innovation appeared first on Grainews.

The injected polymer material on Morris’ new opener, however, offers some significant improvements over the cast iron version it replaces, according to the company’s marketing reps.

“We’ve worked on these for four years now,” says Garth Massie, Morris’ corporate agronomist. “It’s a type of plastic that’s fairly malleable, so for stones, if there’s an impact, it will take some blows without shattering. It’s kind of an interesting material we’re getting from a company in Germany.”

In field trials over the past four years, the new polymer stood up extremely well, proving it can easily compete with the previous cast iron type when it comes to durability, explains Massie. “We found these boots run in the shadow of the shovel so they don’t really wear,” he says. “So we weren’t too concerned (about wear). On our own drill at the farm we’ve had them on for four years. You wouldn’t really be able to tell them from new. There isn’t really any wear on them.”

Using this new material allowed engineers to improve overall performance of both the opener and the shank. One significant advantage is the polymer is less prone to dust and debris buildup from fertilizer in damp conditions.

“One of the things we learned along the way, with the cast (opener) in these high humidity years if you combine that with some iffy quality fertilizer, dust will gradually build-up on the inside. With these, because of the material, they don’t get a buildup.”

And the polymer openers are more compact, making them shorter and a little narrower than the cast iron type, which helps improve soil flow around the shank.

“They’re quite a bit lighter,” explains Massie. “The cast one is quite a bit longer, it’s about nine inches, and this one is only six. So there is less surface area for soil to stick to. And if you look at the profile, this is 1-1/8 inch wide and the cast is 1-1/2. Soil flow is going to be better around these openers, because they are narrower. You don’t want to have any soil pushed to the outside. That normally determines how fast you go, because you don’t want to cover any adjacent furrows. Hopefully, these will be a little more forgiving, because they’re narrower.

The polymer openers are designed to accommodate granular, liquid and anhydrous ammonia fertilizer types. And because the new openers do a better job of closing the seed trench, Massie notes there is less ammonia smell and off gassing when using anhydrous.

“As far as agronomic performance, fertilizer and seed separation, we really made sure we maintained that level of performance that was always a hallmark of that particular opener,” he continues.

The opener shank itself also gets an update, which includes the additional of nearly a third more hardened carbide parts to help reduce wear on the metal and improve longevity.

“The plastic material is quite a cost saving,” says Massie. “There are two main savings in this design. First you won’t need those mud guards. Those are costly. And this (polymer) material is quite a bit less than cast. But because we’ve introduced almost a third more carbide, that’s basically eaten up any cost advantage. We’re thinking they’re going to be quite similar in cost (to the previous design), but they should last considerably longer. I’m thinking on our own farm it should double the wear life, but I don’t know if that will be true for everybody.”

Also on display at this year’s show was the Razr coulter drill Morris launched last year. But for 2015, it too gets an opener update. When the company first introduced the Razor it was available only in a single-shoot configuration. Company executives, however, acknowledge that really only appeals to a small segment of the marketplace. So this year, the Razr drill on display in Regina sported a new double-shoot option.

The Razr can now place fertilizer between seed rows with the addition of a row of dedicated openers. The fertilizer openers are exactly the same as the seed openers which allows for commonality of parts, and the fertilizer coulters can be locked up to revert to a single-shoot application if desired.

The post Morris introduces plastic seed opener on C2 drill shank appeared first on Grainews.