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Roy Legumex, Walker Seeds merge, prepare IPO

Two major family-owned Prairie processors of pulses and other special crops have merged with plans to go public and build a new canola crushing plant in the northwestern U.S.

Roy Legumex of St. Jean Baptiste, Man., and Walker Seeds of Tisdale, Sask. on Monday announced their merger under the name Legumex Walker Inc. (LWI), and their filing of a preliminary prospectus for an initial public offering (IPO).

The combined LWI becomes what’s billed as “one of the largest processors of pulses and other special crops in Canada,” combining Roy Legumex’s plants at St. Jean, Morden and Plum Coulee, Man. and Regina with Walker’s processing and packaging facilities at Regina, Saskatoon, Brooksby and Runciman, Sask., plus a stake in a plant at Avonlea, Sask.

The companies, which together sold about 400,000 tonnes of pulses and special crops into 70 countries in 2010, will also have “a global sales, logistics and distribution platform and access to multimodal transportation capabilities” through the merger.

Moreover, the company will also have an 85 per cent interest in Pacific Coast Canola, a Seattle-based company planning to build and run a canola oilseed processing plant at Warden, Wash., about 160 km southwest of Spokane, with a capacity of 1,100 tonnes per day.

The Pacific Coast investment will allow LWI to expand into canola crushing for the food processing, food service and animal feed sectors while “further increasing geographic and product diversification,” the company said Monday.

The company said in its preliminary prospectus it expects to hold a significant competitive advantage from its Washington location as the only commercial-scale canola crusher west of the Rockies.

The Pacific Coast project is expected to cost a total of US$109.6 million, to be funded in part by the IPO. The remaining 15 per cent stake is to be held by an arm of commodity trading giant Glencore International.

Walker Seeds founder David Walker will chair the board of Winnipeg-based LWI, while Joel Horn, a Washington businessman with a background in the canola biodiesel business, will be president and CEO of the merged firm. Roy Legumex president Ivan Sabourin will serve as an LWI vice-president.

Cormark Securities will lead the syndicate of underwriters handling LWI’s IPO, including CIBC World Markets, Macquarie Capital Markets Canada, Scotia Capital and HSBC Securities.

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