WORLD-GRAIN.com
MWBC Note: According to this article, Above Food will be building in Stanford. “….the TRG division’s recent addition of a new company-controlled facility in Stanford, Mont., brings more processing capacity and supports export business expansion, including “deeper penetration into the European market.”
REGINA, SK — Above Food Ingredients Inc. plans to buy the specialty-crop food ingredients division of food and feed ingredients supplier The Redwood Group (TRG) in a $34 million cash and stock deal.
Regina, Saskatchewan-based Above Food said the acquisition, announced Aug. 9, will add grains, pulses and specialty crops for the human and pet food markets in more than 35 countries, businesses that totaled $164 million in revenue last year. The regenerative ingredients company noted that the TRG division operates under a farm-to-consumer model covering origination, merchandising, processing and value-added finishing.
Lionel Kambeitz, founder, president and chief executive officer of Above Food, said the transaction also will bring the company its first US-based sourcing, manufacturing and distribution facilities.
“This acquisition marks a major milestone for Above Food and strengthens our international footprint as our first US physical facilities, while also significantly growing our market share of the high-growth pet food category,” said Kambeitz, who also serves as executive chairman. “TRG’s Specialty Crop Food Ingredient division operates in full harmony with our ‘seed-to-fork’ approach, providing us with top-tier processing and storage assets supported by end-to-end quality assurance, product development and safety protocols.”
With the TRG assets, Above Food said it will be better positioned to meet rising demand for sustainably produced, plant-based human and pet food, addressable markets of about $202 billion and $26 billion, respectively. The company pointed to a greater ability to capitalize on growth in pet food, which accounts for about 40% of the TRG division’s sales.
Kambeitz also cited the TRG division’s “strong relationships with growers, suppliers and customers.” Above Food said the acquired assets offer a “vast origination network in the heart of the North American pulse-growing region,” including owned and exclusive third-party partner facilities. The multi-generational relationships with growers, Above Food added, provide origination advantages, supply consistency and reliability, and differentiated crop cycle insights, enabling improved risk mitigation around localized crop conditions and supply chain arbitrage that can boost margin.
“It is a complete business with origination partners that are similarly utilizing sustainable farming practices that are consistent with our Canadian growers, which establishes broader reach across North America that we can leverage for the benefit of our shareholders,” Kambeitz stated.
Also, Above Food said, the TRG division’s recent addition of a new company-controlled facility in Stanford, Mont., brings more processing capacity and supports export business expansion, including “deeper penetration into the European market.”
“The sale of our Specialty Crop Food Ingredient Division represents a significant milestone in The Redwood Group’s growth,” commented Mike Kincaid, founder and president of Mission, Kansas, US-based TRG, whose businesses also include grain merchandising and commodity supply-chain and energy solutions.
“This is a bittersweet moment in our history yet represents a tremendous opportunity for personal and professional growth for our teams in Mission, Kansas, and Chester, Montana, to join an organization principally focused on specialty crops and value-add opportunities in the region, as well as globally,” Kincaid said. “Above Food is adding a well-led group of hard-working innovators, who I expect to continue flourishing and immediately improve utilization and expand the margin structure of several of Above Food’s assets. We are grateful for our team of people who helped build this business and are thankful for the Above Food team’s thoughtful approach to this acquisition.”
Under the terms of the acquisition deal, Above Food agreed to pay TRG $8.1 million in cash plus 5.6 million newly issued shares of Above Food common stock, pending final closing adjustments and customary closing conditions.Above Food Ingredients was formed in late June when Above Food Corp. merged with Bite Acquisition Corp., a New York-based special purpose acquisition company (SPAC), to go public. The ingredients company made its stock market debut on the Nasdaq exchange July 1.