Viterra Inc. said March 10 it planned to acquire Dakota Growers Pasta Co., based in Carrington, North Dakota. It did not provide an acquisition price, but it said that Dakota Growers has an enterprise value of US$240 million.
Dakota Growers is one of the largest durum mills in North America and the third-largest producer of dry pasta, Viterra said. It expects the transaction to close in the second quarter of this year.
“It’s right in our wheelhouse,” chief executive Mayo Schmidt said in a conference call, adding that Viterra is one of the biggest durum handlers in North America. He said the acquisition will “more than modestly” add to earnings.
The outlook for the year is positive in light of the Canadian Wheat Board’s target of achieving the largest grain exports in 10 years.
Viterra’s prospects also look strong because South Australia’s current harvest estimate is well ahead of last year’s production in the state, the company said.
In Canada, Viterra expects farmers to plant 16.5 million acres of canola this spring, an increase from last year. That bodes well for the company because canola is a big consumer of crop inputs such as seed and fertilizer, said Doug Wonnacott, senior vice-president of agri-products.
Canadian canola shipments with the common blackleg disease have faced import restrictions from China since November. Viterra has continued shipping to China under its new rules, but volume has dropped off, said chief operating officer Fran Malecha.