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Rail News: Short Lines & Regionals
AGT Food to acquire short-line operator Mobil Capital Holdings
AGT Food and Ingredients Inc. announced earlier this week that it signed an agreement to acquire Mobil Capital Holdings Ltd., a Saskatchewan-based agricultural processor and exporter that operates short-line railways in Canada.
The total purchase price is $57.5 million (in Canadian dollars), including stock and a promissory note. AGT, also known as Alliance Grain Traders, is a processor of value-added pulses, staple foods and ingredients for export and domestic markets.
AGT expects the transaction to be completed in the fourth quarter, according to a press release.
Mobil operates short-line railways from Regina to Saskatoon, and from Saskatoon to the Alberta border linking agricultural production regions with central rail hubs in Saskatchewan's major cities. The firm's businesses include Mobil Grain Ltd., 101115529 Saskatchewan Ltd., Big Sky Rail Corp., Mobilex Terminal Ltd. and Mobil Transloading Ltd.
"This is an exciting follow-on acquisition to our previously completed investment in bulk loading and handling assets of West Central Road and Rail announced in June 2015," said Murad Al-Katib, AGT's president and chief executive officer.
"Rail transportation and loading infrastructure are essential elements to the competitiveness of our legacy segment, especially in the current global supply and demand environment," he said. "The ability to control our logistics chain with ownership of rail logistics assets and short line rail infrastructure and equipment servicing our handling assets, we feel, allows AGT to create a competitive advantage over time."
Contact Progressive Railroading editorial staff.