Regina-based AGT Food and Ingredients has sold its short-line and bulk handling infrastructure to an American asset management firm called GCM Grosvenor.
A news release from AGT notes the sale includes the following: “MobilGrain and its operating subsidiaries – Last Mountain Rail, with 140 kms (87 miles) running from the Regina Plains to Central Saskatchewan, including 160 kms (100 miles) of running rights on CN; Big Sky Rail, with 431 kms (258 miles) running from Central Saskatchewan through West Central Saskatchewan; MobilEx Terminal Ltd., a port and loading facility for grain and potash located in Thunder Bay, Ontario; and Intermobil, a privately-operated, state-of-the-art intermodal terminal located in Regina, SK, featuring CN service to the Atlantic, Pacific and Gulf Coasts and CN’s intermodal terminals. Bulk loading infrastructure includes Saskatchewan facilities in Condie, Aylesbury, Delisle, Dinsmore, Lucky Lake, Beechy, Elrose, Kyle, Eston and Laporte for the receiving of grains, canola and pulses from farmers in the region.”
AGT also says the infrastructure “connects to CN main rail lines, moving Saskatchewan agri-products to coastal ports and markets around the globe.”
President and CEO of AGT Food and Ingredients Murad Al-Katib says a 20-year agreement with GCM was signed so his company can still use the infrastructure. He assures farmers they won’t see any change in the day-to-day operations. “Farmers will continue to deliver, so AGT contracts will continue to be signed, they’ll continue to deliver to the same facilities, same staff will be at those facilities, so all of the management of AGT and Mobil companies that were involved in these assets are all moving over to the new partnership structure,” Al-Katib said.
The main reason for the sale, according to Al-Katib, is to continue growing the company and agriculture. The capital generated from this sale will be used to invest in additional processing facilities. “We’re growing very quickly – our revenues are up over a billion dollars over the last three years, so you know from that perspective we see a very strong opportunity in the world for continued manufacturing of staple commodities, so oats, split lentils, split peas, pulse flowers, pasta made from pulses and pasta made from durum wheat – these are the areas where we’re going to continue to invest in our global supply chain.”
Al-Katib says they had a process in place to find a buyer and GCM checked off all the boxes. “We went out with a process, they responded, we had a very strong alignment of interest and let’s not forget I had to choose somebody to sell these shares to but then I signed a 20-year agreement with them in a long term partnership, so I certainly had to like the party that I was dealing with and GCM was head and shoulders the winner of this process and we’re excited to have them as part of our business community in Saskatchewan.”
“This transaction underscores Saskatchewan’s essential role in the global economy as a key producer of critical minerals and agricultural products. Integrating MobilGrain’s shortline rail with CN’s network creates significant growth potential, while Intermobil and MobilEx terminals will continue supporting agricultural and potash exports. In line with GCM Grosvenor’s responsible contracting principles, all employees at these facilities will remain with MobilGrain. We look forward to supporting Kent Affleck and his team’s growth plans,” said Matthew Rinklin, Managing Director, Infrastructure at GCM Grosvenor in the news release. “In addition, partnering with Bluejay Capital Partners, whose transportation and shortline rail expertise is vital, will further strengthen MobilGrain’s future success.”
“CN is pleased with the long and successful partnership with AGT and MobilGrain in this important Saskatchewan shortline railway corridor. We look forward to building on this successful collaboration to grow our business by working with GCM Grosvenor and MobilGrain to further improve first-mile service, and to bring more of Saskatchewan’s potash and agricultural products to the world,” said Remi G. Lalonde, Executive Vice-President and Chief Commercial Officer at CN.
Financial terms and other details of the sale and subsequent agreement have not been disclosed. The transaction needs regulatory approval and closing conditions before the deal can be closed, which is expected to happen late this year or early next year.