AGI, a leading provider of equipment solutions for agriculture bulk commodities, acquires 100% of the shares of Milltec Machinery Limited, a market leading manufacturer of rice milling and processing equipment in India.
Ag Growth International Inc. (AGI) announced that the previously disclosed transaction to acquire 100% of the shares of Milltec Machinery Limited (“Milltec”) was completed. The purchase price for Milltec was $109.5 million, plus the potential for up to an additional $38.4 million based on the achievement of EBITDA targets. The transaction was funded by AGI’s revolving credit facility. For the twelve months ended January 31, 2019, Milltec’s sales and EBITDA were $56.2 million and $10.1 million, respectively.
Milltec is headquartered in Bangalore, India, and is a market leading manufacturer of rice milling and processing equipment in India. “The acquisition of Milltec marks an important step for AGI as we expand into rice equipment and enter the large, and rapidly growing, markets in India. Milltec now forms the foundation of our platform in India as we build a footprint to deliver our complete 5-6-7 strategy. India is one of the world’s largest producers and consumers of all agriculture products and will invest heavily in the infrastructure required to facilitate the daily lives of over a billion people. Milltec joins AGI at an inflection point in its journey from a small regional company to a Pan-India business. We will invest and collaborate to accelerate this journey. The founders of Milltec, and a very talented team, are joining AGI in the pursuit of our goal to supply the world’s food infrastructure,” said Tim Close, President and CEO of AGI.
The acquisition of Milltec moves AGI into the rice processing systems space with a complete product line and establishes AGI’s platform in India. AGI gains seasonal and cyclical diversification through this acquisition.Milltec adds a complete rice processing product line to AGI’s product catalogue and provides a platform for further consolidation in India, which is very fragmented across the seed, fertilizer, grain, feed and food industries.The acquisition also provides AGI with greater access to the broader Asian markets.