Animal nutrition buy: Alltech to acquire Ridley, Inc.

Animal nutrition buy: Alltech to acquire Ridley, Inc.

Commercial animal nutrition company Alltech buys Ridley

Alltech and Ridley Inc. announced Thursday that they have entered into a plan of arrangement agreement under which Alltech will acquire 100% of the outstanding stock of Ridley.

Ridley manufactures and markets a full range of animal nutrition solutions, including formulated complete feeds, premixes, feed supplements, block supplements, animal health products and feed ingredients.

Related: How To Make Your Farm Dreams Come True: About Alltech's Pearse Lyons

Ridley's customers include livestock producers as well as equine and pet breeders. Ridley's products are sold to producers by direct sales or through distributor and dealer channels.

Commercial animal nutrition company Alltech buys Ridley

The transaction "allows Alltech to deliver better performance and value to livestock and poultry producers across the globe," said Dr. Pearse Lyons, founder and president of Alltech.

"With Ridley's leading animal nutrition supplements, block products, extensive livestock and poultry producer distribution network and on-farm presence, we will be able to bring our advanced nutrition technology to market faster and more effectively."

Steven VanRoekel, president and CEO of Ridley, said bringing the two companies together will provide "the best nutrition solutions to meat, milk and egg producers around the world."

Both companies invest in sustainable nutrition solutions and advanced feeding programs that optimize physical and financial performance on farms, leading to increased efficiency and value.

Alltech spends approximately 10% of its gross revenue on R&D, more than any other company in the industry. Ridley has a strong technical team with over 40 advanced degree staff who have produced some of the industry's best-selling and most widely-recognized blocks and nutrition supplements and will now be working side-by-side with Alltech's team of approximately 150 Ph.D.s.

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This deal will further enhance Alltech's primacy in science and allow it to deliver this to a broader range of livestock and poultry producers in the U.S. and bring more advanced animal nutrition solutions to countries across the globe.

Improved animal nutrition is a pressing need for the productivity of the world's livestock and food chain, Alltech said. Feed costs comprise the majority of livestock production costs.

By improving animal nutrition, livestock and poultry producers are able to realize a significant increase in efficiencies and return on investment. Alltech's continued commitment to tailoring nutrition and health programs with a focus on natural, antibiotic-free ingredients allows livestock and poultry producers to raise healthier animals through a process that is better for animals, consumers and the environment.

The combined company will have a presence in over 128 countries and 4,200 employees worldwide. Alltech has more than doubled its sales in the last three years and is on target to achieve USD $4 billion in sales in the next few years.

The outstanding stock will be purchased for CAD $40.75 per share. The total consideration payable to Ridley shareholders is approximately CAD $521 million.

The price of CAD $40.75 per share represents a premium of approximately 23% to the 20-day volume weighted average price of Ridley's common shares on the TSX as of April 22, 2015. The closing price of the Ridley shares on the TSX on April 22, 2015 was CAD $33.94. The boards of directors of both companies have unanimously approved the merger.

The transaction is subject to approval by Ridley shareholders, regulatory review and other customary closing conditions. The transaction is expected to close by the end of the second quarter.

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