May 2, 2008

Viterra further expands into US feed milling industry

Viterra, Canada's biggest grain company is continuing its expansion into the southern US feed milling industry.

Viterra Inc. said that Unifeed Hi-Pro Inc., a wholly owned subsidiary of Viterra doing business as Hi-Pro Feeds, has signed a definitive purchase and sale agreement for certain assets of Gore Bros., Inc. and Gore's Trucking, Inc. in the US.

The companies, run by the Gore family of Texas for about 60 years, will sell their feed mills at Clovis, N.M. and at Comanche, Tex.

Funded through current operating cash flows, the total cost of the transaction is approximately US$24.2 million including working capital.

The company said it expects the EBITDA (earnings before income, taxes, depreciation and amortization) of its livestock feed and services division to rise by about 20 percent through the deal, "after synergies."

Hi-Pro owns and operates mills in Texas, New Mexico and Oklahoma.

The company was formed through the combination of Saskatchewan Wheat Pool and Agricore United on May 29, 2007.

Viterra is Canada's leading agri-business, with expected annual sales of approximately US$4 billion.

The company has extensive operations and distribution capabilities across Western Canada, and with operations in the United States and Japan.

The new company is diversified into crop inputs and equipment, grain handling and marketing, livestock feed and services, agri-food processing and financial products.