Grain handling equipment firm Ag Growth International has stepped across the Atlantic for another acquisition in the grain dryer business.
The Winnipeg company, whose divisions across Canada and the U.S. make augers, belt conveyors, bins and aeration equipment, announced a deal Thursday to buy Mepu Oy, a Finnish maker of stationary and mobile grain drying systems, for about C$11.7 million.
Mepu, based at Ylane, about 190 km northwest of Helsinki, sells its products in Finland and Eastern Europe, mainly in the Baltic region and Belarus, averaging about C$18.6 million in sales per year in its last three fiscal years, Ag Growth said.
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“Mepu’s product line is a strong fit with Ag Growth’s existing catalogue and we expect both companies will benefit from the other’s distribution network and product offering,” Ag Growth CEO Rob Stenson said in a release Thursday.
Also, Stenson said, “Mepu’s geographic location provides our first corporate footprint on the doorstep of growth markets in Eastern Europe and Russia.”
The Finnish company’s “physical presence” in that region is expected to give Ag Growth “a platform for the introduction of our existing farm catalogue into an established dealer network,” he said.
Founded in 1952, Mepu lists mobile dryers, stationary and package dryers, continous dryers, round grain silos, modular silos, elevators, screws, U-screws and classifying screens among its grain handling product lines.
Mepu, on its website, said its dryers run on fuel oil but are also compatible with “alternative biofuels such as wood chips, wood pellets or peat.”
Mepu’s managing director Arto Sainio “has agreed to stay in the leadership role for a sufficient period of time to help us manage the transition,” Stenson said.
Ag Growth, which last month posted 2009 net earnings of $45.3 million on sales of $237.3 million, said Thursday it plans to finance the Mepu deal from cash on hand.
