World Grain - November 2018 - 10

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Bowe: Lansing deal 'significantly expands'
presence in ag market
MAUMEE, OHIO, U.S. - After more than a decade of partnership, The Andersons, Inc. and Lansing Trade Group, LLC are fully aware of the pros and cons of each other's operations. Thus, the
decision announced in October that The Andersons would acquire
the remaining two-thirds of Lansing equity that it did not already
own seemed like a logical move for the parties involved.
"Lansing is a company that we know very well after 15 years
of partnership," Patrick E. Bowe, president and chief executive
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with analysts. "By fully acquiring and merging Lansing into The
Andersons, we will create a business of complementary grain and
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In an investor day conference in December 2017, The
Andersons outlined the criteria the company applies to evaluate
merger and acquisition opportunities. Bowe said Lansing Trade
Group checked all the boxes.
"First of all, we want to own assets that are core or adjacent,"
he said. "We have a long history together with Lansing, which
owns complementary assets and business lines. The fact that
the Lansing assets don't overlap ours geographically is an addHGEHQH¿W
"We also want any acquisition to improve our ability to meet
customer needs, and Lansing enhances the scale and scope of our
trading activities by growing our trading operations and allowing us to trade new commodities. In addition, Lansing's highly
complementary customer base will give us opportunities to sell
our Freedom risk management tools to more farmer customers.
The acquisition also increases our footprint and penetration in
high-growth specialty food and feed ingredients markets, creating
the opportunity to diversify our activities outside of traditional
products and geographic regions. The combined scale will allow
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transaction to be accretive within a year. The transaction also provides an attractive return on invested capital with a good payback
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After closing, Lansing will be integrated with The Andersons'
Grain Group. The combined operation will be jointly led by Corey
Jorgenson, president of The Andersons Grain Group, and William
E. Krueger, president and CEO of Lansing Trade Group. Bowe
said Krueger will run the commodity trading part of the business
while Jorgenson will run originations, which includes working on
the front-end merchandising with farmers. Krueger and Jorgenson
will work together to co-manage the food business, Bowe said.
"What Lansing brings to The Andersons is a larger grain and
feed ingredient merchandising platform with a larger Western
10

Patrick E. Bowe, president and chief executive officer of The Andersons.
presence that's very complementary to The Andersons' mostly
Eastern footprint," Krueger said. "We've concentrated more on
merchandising and trading than on operating grain facilities.
We're also merchants of DDGS and merchandise a total of approximately 4 million tons of feed ingredients annually. We have
a successful pet food business, specialty grain business and frac
sand business that handles nearly 3 million tons annually. Our
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45% in our grain division; energy at 30%; and feeding specialty
ingredients at 25%."
Asked by an analyst where the potential cost savings from the
merger will come from, Krueger said the companies feel good
about the opportunities in front of them.
"Obviously, the overhead when you run two separate companies, there are some things that are right up front that you can
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from audits to subscriptions to a board of directors to licenses and
things like that there are, probably - obviously, we will consolidate our systems. That will take longer. Our Grain business
is fully operational on SAP. That's something we won't do day
one, but we see that longer term, we will bring them onto our
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November 2018 / World Grain / www.World-Grain.com

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World Grain - November 2018

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