Canadian Manufacturing

Kingspan buys Vicwest for $350M, then sells Westeel divison for $221M

Insulation maker Kingspan Group PLC pulls three-way buy-and-sell deal that splits agriculture products maker Vicwest in two



WINNIPEG—Oakville, Ont.-based Vicwest Inc., manufacturer and distributor of engineered storage and handling systems for grain, fertilizer and liquid, has agreed to be acquired for $350 million by insulation maker Kingspan Group PLC.

Kingspan will then sell Vicwest’s Westeel Division—an agriculture products manufacturer—to grain handling, conditioning and storage equipment manufacturer Ag Growth International Inc. (AGI) for $221.5 million.

Kingspan will retain Vicwest’s Building Products division, which is valued at about $154.5 million.

Headquartered in Winnipeg, Man., Westeel makes grain storage solutions in Western Canada, as well as a growing international platform offering highly engineered crop storage and handling solutions.

Westeel is expected to generate Adjusted EBITDA of approximately $20 million in the 2014 fiscal year.

The deal reflects an enterprise value for Westeel of approximately $210 million and $11.5 million attributed to certain assets to be acquired by AGI, including net cash and working capital adjustments and a facility in Regina, Sask.

“Today’s acquisition will add an iconic Canadian brand of grain storage to AGI’s already impressive stable of leading manufacturers of grain handling and conditioning equipment,” said Gary Anderson, president and CEO of AGI. “Westeel provides a complementary product offering to expand our growth platform within North America and around the world. Combined we create a Canadian-based agricultural champion, providing an expanded North American platform to leverage globally while in turn reducing our overall risk profile to emerging market development.”

AGI says Westeel’s global focus on Europe, Middle East, North Africa and India complements AGI’s focus on Eastern Europe, Latin America, Southeast Asia and Australia.

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