Winnipeg, Man., December 21, 2010 — Ag Growth International today announced the acquisition of 100% of the outstanding shares of Tramco, a manufacturer of heavy duty chain conveyors and related handling products that are sold primarily into the grain and oilseed processing sectors. The purchase price of USD $21.3 million plus closing costs and a working capital adjustment will be financed from Ag Growth’s cash on hand and represents a valuation of approximately five times Tramco’s normalized EBITDA over their last two fiscal years.
Tramco was established in 1967 and is located in Wichita, Kan., with an overseas manufacturing facility in Hull, England and a sales office in the Netherlands. Tramco is active in both the domestic and international grain processing sectors with average sales over the last two fiscal years of approximately USD $30 million. Tramco’s international footprint is augmented with a strategic alliance in China and sales efforts in other major processing markets such as South America. To date, Tramco has sold conveyors into more than fifty foreign countries.
“We are very excited to join forces with this market leader in the grain processing segment”, said Gary Anderson, Chief Executive Officer, “Tramco is an industry leader with a premier brand name and strong market share and as such provides an excellent entry point into the next important segment of the chain, the grain processing sector. The processing industry is an integral part of the food supply chain and is a compelling direction for Ag Growth to continue to build its leadership in grain handling equipment.
“The leverage of customer relationships to provide “one stop” shopping, the ability to participate in a market where international growth is strong, and the opportunity to raise our North American profile are all powerful, strategic reasons to make our entrance with a strong brand like Tramco. Tramco has established a globally recognized brand name under the leadership of founder Leon Trammell, who built his company based on product innovation and an extreme passion for customer satisfaction. Leon has positioned Tramco well to take advantage of increasing opportunities in an expanding grain processing industry.”