LEXINGTON, Ky. and MANKATO, Minn. (April 23, 2015) – Alltech is acquiring Minnesota-based animal nutrition company Ridley Inc. in a deal valued at $427.2 million, the two companies announced today. Under their agreement, Alltech will acquire 100 percent of the outstanding stock of Ridley, a North American animal nutrition company whose stock trades on the Toronto exchange.
The agreed upon Canadian $40.75 per share price is a 23 percent premium to the 20-day volume-weighted average price of Ridley’s common shares on the TSX as of April 22. The deal is Alltech’s eighth acquisition since 2011 and the biggest by far. The combined companies will have annual revenues topping $1.6 billion. Alltech expects to achieve accelerated product innovation from combined technology, research and data analytics.
Serving customers mainly in the United States and Canada, Mankato, Minn.-based Ridley employs more than 700 in the manufacture, sales and marketing of complete feeds, premixes, feed supplements, block supplements, animal health products and feed ingredients through its Hubbard Feeds, Ridley Block Operations and Ridley Feed Ingredients as well as one joint venture, Masterfeeds LP. Customers include livestock, poultry, equine breeders and growers who produce meat, milk and egg products that are processed into consumer food products.
The deal grows Alltech’s number of production facilities from 48 to 77 and all will be antibiotic-free, which is of increasing importance in the commercial global food chain.
The sale price of Canadian $40.75 . The closing price of the Ridley shares on the TSX on April 22, 2015 was CAD $33.94. The boards of directors of both companies have unanimously approved the merger.
“This transformative transaction that combines two industry leaders allows Alltech to deliver better performance and value to livestock and poultry producers across the globe,” said Dr. Pearse Lyons, founder and president of Alltech. “With Ridley’s leading animal nutrition supplements, block products, extensive livestock and poultry producer distribution network and on-farm presence, we will be able to bring our advanced nutrition technology to market faster and more effectively. This combination creates a new model to deliver superior animal nutrition and tailored feeding programs supported by robust scientific research and data analytics. This deal underscores our continued momentum in growing our business through strategic acquisitions of best-in-class companies with trusted technology and brand recognition.”
“Joining Ridley with Alltech is about bringing the best nutrition solutions to meat, milk and egg producers around the world,” said Steven J. VanRoekel, president and CEO of Ridley. “Alltech is the technological leader with a broad global footprint so by uniting forces we will create a scalable platform to grow and market solutions to enhance the profitability of producers. We are also joining a financially strong company that is committed to investing in science and innovation so that we can deliver the most advanced animal nutrition solutions.”
Ridley’s products are sold to producers by direct sales or through distributor and dealer channels.
Both companies are industry leaders committed to investing in sustainable nutrition solutions and advanced feeding programs that optimize physical and financial performance on farms, leading to increased efficiency and value. Alltech spends approximately 10 percent of its gross revenue on R&D, more than any other company in the industry. Ridley has a strong technical team with over 40 advanced degree staff who have produced some of the industry’s best-selling and most widely-recognized blocks and nutrition supplements and will now be working side-by-side with Alltech’s team of approximately 150 Ph.D.s. This deal will further enhance Alltech’s primacy in science and allow it to deliver this to a broader range of livestock and poultry producers in the U.S. and bring more advanced animal nutrition solutions to countries across the globe.
Improved animal nutrition is a significant factor in the productivity of the world’s livestock and food chain. Feed costs comprise the majority of livestock production costs. By improving nutrition, producers realize a significant increase in efficiencies and return on investment. Alltech’s continued commitment to tailoring nutrition and health programs with a focus on natural, antibiotic-free ingredients allows livestock and poultry producers to raise healthier animals through a process that is better for animals, consumers and the environment.
The combined company will have a presence in over 128 countries and 4,200 employees worldwide. Alltech has more than doubled its sales in the last three years and is on target to achieve USD $4 billion in sales in the next few years.
The transaction is subject to approval by Ridley shareholders, regulatory review and other customary closing conditions. The transaction is expected to close by the end of the second quarter.
Founded in 1980 by Lyons, Alltech improves the health and performance of people, animals and plants through natural nutrition innovation using yeast fermentation, enzyme technology, algae and nutrigenomics. It has more than 3,500 employees and a strong regional presence in Europe, North America, Latin America, the Middle East, Africa and Asia.
Alltech is the only privately held company among the top 10 animal health companies in the world, which it considers a competitive advantage that allows it to stay focused on customer needs, innovation and long-term objectives. According to Alltech, its growth in recent years has been 20-25 percent annually.