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The Andersons: to Acquire Lansing Trade Group

Maumee / OH. (tagg) The Andersons Inc. announced that it has entered into a merger agreement with Lansing Trade Group, LLC, its long-time affiliate, to acquire the 67.5% of Lansing equity that it does not already own for cash and stock currently valued at a total of approximately USD 305 million.

In addition to paying approximately USD 175 million in cash, the Company will issue unregistered shares to current Lansing equity holders presently valued at approximately USD 130 million, subject to certain closing adjustments and changes in the share price of Andersons stock, respectively. The transaction will also result in the consolidation of Thompsons Limited of Ontario, Canada and related entities as they have been jointly owned by Lansing and the Company. The Company will assume approximately USD 166 million of long-term debt, consisting of up to USD 130 million from Lansing and about USD 36 million from Thompsons. The implied purchase price is less than 9 times Ebitda for the twelve months ended August 31, 2018.

Based on the current market price of Andersons shares, the Company would issue approximately 4.4 million unregistered shares, including some shares to replace existing unvested incentive compensation and fund retention payments, which would represent approximately 13% of revised new total outstanding shares.

The Company expects the transaction to be accretive to EPS within the first full year after closing and to achieve annual run rate cost synergies of at least USD 10 million by year-end 2020. The transaction is expected to close before January 31, 2019, subject to Lansing shareholder approval and customary government and regulatory approvals.

Lansing will be integrated with The Andersons’ Grain Group, and the combined operation will be jointly led by Corey Jorgenson, President of The Andersons Grain Group, and Bill Krueger, President and CEO of Lansing Trade Group.

«This acquisition creates a grain business of highly complementary assets with greater scale that significantly expands our reach in the agricultural marketplace,» said Pat Bowe, President and CEO of The Andersons. «We firmly believe the union of these core agricultural businesses will allow us to compete more successfully, provide greater value across an expanded platform, and grow more profitably. The new, larger organization will provide significant career opportunities for our employees,» Bowe continued.

«Combining our talented teams is a very compelling opportunity to unlock potential by bringing together the best of each business. We will be able to provide Freedom pricing tools to the current Lansing producers while leveraging The Andersons’ facilities to merchandise more bushels to enhance our ability to supply our consumptive demand base. In effect we will be developing a more robust North American supply chain,» commented Bill Krueger, President and CEO of Lansing Trade Group.

«The full integration of Lansing will accelerate execution of our strategic intention to grow income from originations and managing grain assets, expand trading and risk management services, and broaden our food ingredients and specialty grains and feed ingredients platform,» said Corey Jorgenson, President of The Andersons Grain Group.

The Andersons will host a webcast on October 16, 2018 at 9:00 a.m. Eastern Daylight Time to provide more information about the transaction. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 1485508). To access the webcast, click on the link: https://edge.media-server.com/m6/p/7vhuw6f8. A replay of the call can also be accessed under the heading «Investors» on the Company website at www.andersonsinc.com.

Deutsche Bank Securities Inc. and Goldman Sachs + Co. LLC are serving as financial advisors to The Andersons, Inc., with Kirkland + Ellis LLC acting as legal counsel. Citigroup Global Markets Inc. is serving as a financial advisor to Lansing Trade Group, LLC, with Husch Blackwell LLP acting as legal counsel.