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Published February 16, 2012, 05:56 PM

Anderson seed inquiries

FARGO, N.D. — A Canadian specialty grain firm has purchased two Minnesota grain companies for a total of $19 million amid financial problems with one of the purchased companies.

By: Mikkel Pates, Agweek

FARGO, N.D. — A Canadian specialty grain firm has purchased two Minnesota grain companies for a total of $19 million amid financial problems with one of the purchased companies.

St. Hilaire Seed Co., one of the largest dry bean processors in the United States, has been sold to Winnipeg, Manitoba-based Legumex Walker Inc., the company said in a statement issued Feb. 15. At the same time, the company said it is separately purchasing “assets of” Anderson Seed Co. of Mentor, Minn., in a total deal worth $19 million.

Ronald L. Anderson of Mentor, Minn., is chief executive officer of both companies. His daughter, Stephanie, is general manager of Anderson Seed Co. Inc., and a daughter-in-law Julie, had been operations manager of St. Hilaire Seed. St. Hilaire Seed Co. Inc., of Mentor was established in 1993 and Anderson Seed Co. was formed in 1999. The North Dakota Grain Dealers directory lists locations at Crystal, Garske, Grafton and Hamilton in the state.

The deal comes amid reports of financial trouble.

The South Dakota Public Utilities Commission on Feb. 16 announced it would hold a meeting at 1 p.m. on Feb. 17 in Pierre to consider suspending Anderson Seed’s license at its Redfield, S.D., site. This is not part of the Canadian purchase.

The SDPUC suspension petition says there may be more than $2.6 million in unpaid grain bills in South Dakota alone. Chris Nelson, chairman of the SDPUC, says the hearing will be streamed live. One McLaughlin, S.D., farmer tells Agweek the SDPUC staff had said some 30 to 40 South Dakota farmers may be involved. The McLaughlin woman said her farm is owed some $222,000 for sunflowers delivered from October to December. The SDPUC said it started getting complaints in mid-January.

Sue Richter, director of the licensing division with the North Dakota Public Utilities Commission, said her office had received 20 calls on the issue on Feb. 16, with some farmers claiming they are owed well over $100,000. One of those claims, at Anderson Seed’s Durbin, N.D., facility will trigger a formal insolvency case. The agency is preparing documents for the commission to file in district court, probably in Cass County. Richter says the company has a $280,000 bond, and that complaints total more than that, but she couldn’t say how much. She said she didn’t know if a credit-sales contract indemnity fund might come into play. St. Hilaire has had no complaints against it in North Dakota, according to Richter.

Margaret Hart, of the Minnesota Department of Agriculture said the department is “aware of the situation” but it has not yet received a grain bond proof of complaint.

Lawyers involved

Ron and Stephanie Anderson met with James Mehlhaff of the SDPUC on Feb. 7, and told him a refinance plan was in the works by Feb. 15, according to the hearing petition. They didn’t say they intended to sell assets and “expressly stated bankruptcy was not considered,” the petition says.

Both St. Hilaire Co. and Anderson Seed have referred farmers and others to a phone number, run in association with the Rinke, Noonan law firm of St. Cloud, Minn. Mehlhaff says Gary Leistico, their attorney, said Anderson doesn’t intend to accept additional grain. Ron Anderson did not immediately answer a phone message left at his home.

Meanwhile, Legumex Walker referred questions to Jon Austin, owner of Austin & Associates, a public relations company based in the Minneapolis area. Austin said the St. Hilaire and Anderson Seed companies were two entirely different companies, with some ownership in common. He said he understood the Andersons would continue to run the Redfield, S.D., plant.

Legumex Walker was formed in July 2011 with a merger of Roy Legumex of St. Jean Baptiste, Manitoba, and Walker Seeds of Tisdale, Saskatchewan, and is publicly traded. Austin says the new president and chief executive officer is Joel Horn, who came out of what is now the company’s canola division, which is building a processing plant at Warden, Wash. Roy Legumex had dry bean facilities in Morden and Winkler, sunflowers in St. Jean Baptiste, and lentils in Richardson, Saskatchewan, and was formed from Alfred Roy Trading Co., which was established in 1948.

Specialty juggernaut

Legumex Walker processes and sells lentils, peas, beans and chickpeas and other specialty crops and canola. It has 11 processing plants. It owns 85 percent of Pacific Coast Canola, which is building a canola oilseed processing plant in Washington state. Legumex said the deals “expand the company’s position in the North American specialty crop industry” and will “boost profits per share.”

In its news announcement, Legumex Walker said the St. Hilaire Seed sale included $12 million in cash as well as $3.5 million in working capital, and refinanced $2.5 million in long-term debt. St. Hilaire processing plant handles 4.5 million metric tons of beans, more than doubling Legumex Walker’s dry bean capacity. St. Hilaire owns five receiving facilities in North Dakota and one in Minnesota. Austin said this company will continue under the St. Hilaire name, as a Legumex Walker division.

In the same release, Legumex Walker announced it had paid $4.8 million for “sunflower seed processing assets previously owned by Anderson Seed Co.” of Mentor. Those assets include a processing plant with 40,000-metric-ton capacity at Mentor and two North Dakota storage operations at Durbin and Selz, in Pierce County, with a combined capacity of 13,000 metric tons in North Dakota. Those will now be known as Legumex Walker Sunflower, a new division, Austin said. Legumex Walker said the company will hire 25 people to operate it.

St. Hilaire Seed employs 35 people buying and processing pinto and black turtle beans, and other beans, Legumex Walker said. In the press release, CEO Horn said the deal “brings us important new relationships with grower communities in Minnesota, North Dakota and South Dakota.”

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