Canada fund eyes domestic company
Güncelleme Tarihi:
Hürriyet Daily News
Oluşturulma Tarihi: Haziran 24, 2009 00:00
ISTANBUL - Turkey’s Arbel Group, a leading processor of lentils and grains and the largest exporter of legumes in Turkey, and Alliance Grain Traders Income Fund are in talks. The fund, which is one of Canada's largest exporter of green lentils, has made an offer to purchase Arbel for $93 million cash and share deal.
A Canadian fund has agreed to buy the Arbel Group, Turkey’s largest legumes exporter well known for its Arbella pasta brand, in a $93 million cash and share deal.
The Alliance Grain Traders Income Fund announced that it has sent an exclusive, non-binding letter of intent with Arbel to combine the businesses and create a leading processor and trader of legumes and specialty crops. Under the terms of the letter of intent, the fund proposes to acquire all of the issued and outstanding shares of the companies of the Arbel Group for a purchase price of $93 million, it said June 17.
It is not possible to comment on the proposal at present, and the necessary statement will be made soon, Arbel Group Chairman Mahmut Arslan said, according to daily Hürriyet.
The Arbel Group has a 50-year operating history and has grown to become a leading processor of lentils and grains and the largest exporter of legumes in Turkey. From its hub in Turkey, the Arbel Group currently exports to 52 countries in Asia, Africa, Europe and the Americas.
The Arbel Group operates processing and production facilities in the southern city of Mersin. In 2002, the Arbel Group expanded its operations to include the production of pasta and has quickly grown to become the fourth largest pasta producer in the country. Turkey is the second largest exporter of pasta in the world following Italy, while Arbel Group is the top exporter of pasta in Turkey.
Background to the transaction
Alliance Grain and the Arbel Group benefit from existing sourcing and selling relationships and a shared customer base. The principals of the Arbel Group, together with the management team of Alliance Grain, established Saskcan Pulse, a predecessor company to Alliance Grain. The Arbel Group provided capital, equipment, staff and operating practices to ensure a successful start for Saskcan Pulse. The principals of the Arbel Group currently own approximately 31 percent of the voting securities of the fund on a fully diluted basis. This transaction will solidify the strong existing business relationships while providing a platform for new and attractive growth opportunities.
Increasing share in the market
The acquisition of the Arbel Group will significantly increase Alliance Grain’s share of the international lentil market, further diversify its product offerings, product sources and customer base, and will nearly double the size of its current operations, the fund said. Alliance Grain and the Arbel Group expect to see substantial benefits through combining proprietary processes, sourcing and selling relationships, and the customer bases of the two companies, it added.
"Through the transaction, Alliance Grain will have a stronger ability to service international customers as Arbel provides a global sourcing point for entry into north Africa, the Middle East and Western Europe. Alliance Grain will increase its warehousing, inventory and distribution points, thereby reducing transportation and timing issues associated with having products shipped from Australia and North America to these regions. By optimizing its distribution networks, management believes that higher margins will be achievable for the combined business. The proposed transaction is expected to be immediately accretive to the Fund’s earnings per unit," it said.
"The combination with Arbel will provide significant opportunities to drive synergies and increase margins through continuous operational improvements, enhancement of existing relationships and achievement of freight, inventory and processing efficiencies" said Murad Al-Katib, chairman, president and chief executive officer of Alliance Grain. "Having a well-established presence in Turkey will enable Alliance to effectively service global markets by providing direct access to Western Europe, Africa and the Middle East. Legume crops are experiencing strong fundamentals through increased consumption and planting trends and this transaction provides an excellent opportunity to capitalize on these trends."
As of March 31, 2009, the Arbel Group had cash of $10.1 million, net working capital of $42.7 million, operating debt of $43.1 million and term debt of $15.9 million. The combined company would continue to be headquartered in Regina, Saskatchewan. The proposed acquisition is expected to close by the end of August.
The fund is an income trust that derives its income from the operations of its operating subsidiary, Alliance Legume Processors Inc. Alliance, on its own and through its subsidiaries, is engaged in the business of sourcing and processing specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, the United States and Australia handle the full range of legumes and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants.
The Alliance Grain Traders Income Fund announced that it has sent an exclusive, non-binding letter of intent with Arbel to combine the businesses and create a leading processor and trader of legumes and specialty crops. Under the terms of the letter of intent, the fund proposes to acquire all of the issued and outstanding shares of the companies of the Arbel Group for a purchase price of $93 million, it said June 17.
It is not possible to comment on the proposal at present, and the necessary statement will be made soon, Arbel Group Chairman Mahmut Arslan said, according to daily Hürriyet.
The Arbel Group has a 50-year operating history and has grown to become a leading processor of lentils and grains and the largest exporter of legumes in Turkey. From its hub in Turkey, the Arbel Group currently exports to 52 countries in Asia, Africa, Europe and the Americas.
The Arbel Group operates processing and production facilities in the southern city of Mersin. In 2002, the Arbel Group expanded its operations to include the production of pasta and has quickly grown to become the fourth largest pasta producer in the country. Turkey is the second largest exporter of pasta in the world following Italy, while Arbel Group is the top exporter of pasta in Turkey.
Background to the transaction
Alliance Grain and the Arbel Group benefit from existing sourcing and selling relationships and a shared customer base. The principals of the Arbel Group, together with the management team of Alliance Grain, established Saskcan Pulse, a predecessor company to Alliance Grain. The Arbel Group provided capital, equipment, staff and operating practices to ensure a successful start for Saskcan Pulse. The principals of the Arbel Group currently own approximately 31 percent of the voting securities of the fund on a fully diluted basis. This transaction will solidify the strong existing business relationships while providing a platform for new and attractive growth opportunities.
Increasing share in the market
The acquisition of the Arbel Group will significantly increase Alliance Grain’s share of the international lentil market, further diversify its product offerings, product sources and customer base, and will nearly double the size of its current operations, the fund said. Alliance Grain and the Arbel Group expect to see substantial benefits through combining proprietary processes, sourcing and selling relationships, and the customer bases of the two companies, it added.
"Through the transaction, Alliance Grain will have a stronger ability to service international customers as Arbel provides a global sourcing point for entry into north Africa, the Middle East and Western Europe. Alliance Grain will increase its warehousing, inventory and distribution points, thereby reducing transportation and timing issues associated with having products shipped from Australia and North America to these regions. By optimizing its distribution networks, management believes that higher margins will be achievable for the combined business. The proposed transaction is expected to be immediately accretive to the Fund’s earnings per unit," it said.
"The combination with Arbel will provide significant opportunities to drive synergies and increase margins through continuous operational improvements, enhancement of existing relationships and achievement of freight, inventory and processing efficiencies" said Murad Al-Katib, chairman, president and chief executive officer of Alliance Grain. "Having a well-established presence in Turkey will enable Alliance to effectively service global markets by providing direct access to Western Europe, Africa and the Middle East. Legume crops are experiencing strong fundamentals through increased consumption and planting trends and this transaction provides an excellent opportunity to capitalize on these trends."
As of March 31, 2009, the Arbel Group had cash of $10.1 million, net working capital of $42.7 million, operating debt of $43.1 million and term debt of $15.9 million. The combined company would continue to be headquartered in Regina, Saskatchewan. The proposed acquisition is expected to close by the end of August.
The fund is an income trust that derives its income from the operations of its operating subsidiary, Alliance Legume Processors Inc. Alliance, on its own and through its subsidiaries, is engaged in the business of sourcing and processing specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, the United States and Australia handle the full range of legumes and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants.