Canadian food maker Viterra has entered into a definitive agreement to buy Dakota Growers Pasta Company, North America’s third-largest dry pasta manufacturer for US$240m.
A Viterra subsidy will start a tender offer to purchase all outstanding Dakota Growers shares for $18.28 per share and all series D preferred stock for $0.10 per share.
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The all-cash transaction has been unanimously approved by the boards of both companies.
Dakota Growers reported revenues of $275m and EBITDA of $42m in fiscal 2009. The company primarily supplies the ingredient, food service and private label retail markets.
Upon completion of the transaction, Viterra will take ownership of an integrated durum mill and pasta production plant in Carrington, North Dakota, and a pasta production plant in New Hope, Minnesota.
“Our offer comes with numerous benefits for both organisations and aligns well with Viterra’s strategic vision to increase investment in food processing,” said Mayo Schmidt, Viterra’s president and CEO.
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By GlobalData“We believe that by building upon our deep knowledge of the North American durum market, we can create additional value and support the increasing demand for high quality pasta desired by today’s health-minded consumer.”
Tim Dodd, president and CEO of Dakota Growers, added that the deal was an “exciting opportunity” for both companies that would “secure our long-term future and allow us to expand our product and service offerings”.
