Ceres Global Ag Corp., a global agricultural, energy and industrial products merchandizing and supply chain company based in Golden Valley, MN, has secured an exclusive option to acquire Delmar Commodities Ltd. based in Winkler, Manitoba.
Subject to successful completion of due diligence activities and the finalization of a definitive share purchase agreement, Ceres hopes to close this potential acquisition on or about August 1 , 2019.
Under the terms of the option agreement, Ceres has the right through July 31, 2019 to purchase all of Delmar's issued and outstanding shares for $16 million in cash paid to Delmar's shareholders, and the assumption of approximately $7.6 million in existing term debt.
Delmar would operate as a subsidiary of Ceres, with Delmar's operations and approximately 55 employees strategically integrated into Ceres' overall operational network.
"We believe the addition of Delmar's grain assets to be an important first step in adding strategic origination for our core products, while also significantly advancing our portfolio diversification strategy with the inclusion of their soybean crush, agricultural seed sales & distribution and birdfeed product lines," says Robert Day, president and CEO of Ceres. "We see significant value in Delmar's capabilities, market knowledge and customer relationships, but perhaps the most attractive aspect of Delmar is its people and their talent. This potential combination is an important step for Ceres as we execute our growth strategy, and we look forward to untapping the potential our teams can have working together."
Ceres commenced due diligence on a potential acquisition of Delmar in February 2019. There can be no assurance that Ceres's due diligence will be concluded to its satisfaction or that an acquisition will be successfully concluded.