October 8, 2007

 

GrainCorp to take over Hunter Grain

 

 

GrainCorp Ltd is set to acquire Hunter Grain Pty Ltd for about $26.5 million.

 

In a statement, GrainCorp said "the acquisition, for $26.5 million (subject to any final purchase adjustments), is part of GrainCorp's strategy to diversify earnings, increase utilisation of port facilities and increase services to the domestic market."

 

Hunter Grain is Australia's largest distributor of imported protein meals, mainly operating from Newcastle, Brisbane, Geelong and Perth.

 

It also runs a transport division made up of company-owned and sub-contractor trucks, and a trading business for grain.

 

Hunter Grain has a turnover of $250 million and employs 30 staff with trading offices in Sydney and transport offices in Cowra.

 

GrainCorp chairman Don Taylor said the acquisition complemented the company's port, international and domestic marketing and road transport capabilities, providing further expansion into domestic markets on the east and west coast.

 

Taylor said the synergies in storage and handling, logistics and marketing activities enable GrainCorp to "secure new earnings from trading co-products, increasing market share in domestic grain and further utilising the extensive bulk handling infrastructure network."

 

This acquisition allows GrainCorp to further diversify into other agri-products and port activities, generating countercyclical earnings during poor seasonal conditions, he added.

 

Taylor said the deal would also strengthen relationships with existing stockfeed customers through the supply and distribution of imported and domestic feedstuffs.

 

Hunter Grain will be headed by existing chief operation officer Malcolm Berry, keeping its name.

The acquisition is expected to be completed by November.