LINCOLN, Neb. (DTN) -- The Andersons, Inc. may soon take an ownership interest in Ulysses, Kansas-based Skyland Grain, LLC, as the companies announced on Thursday they signed a nonbinding letter of intent.
Skyland operates grain storage and handling facilities at 50 locations in Kansas, Colorado, Oklahoma and Texas.
The company also operates three cotton gins, a full-service agronomy sales and service division and a retail and wholesale fuel sales and delivery division.
According to a news release, Skyland also owns a majority interest in Heartland Soil Services, LLC, a precision agronomy testing, data analysis and consulting company with operations in five states.
Maumee, Ohio-based The Andersons is one of the largest agriculture companies in the country with about $14.8 billion in revenue. The company operates commodity merchandising, renewables and crop nutrients facilities in 22 states, four Canadian provinces, as well as in Mexico, Puerto Rico and Romania.
"Under the terms of the letter of intent, The Andersons has been granted exclusivity while the parties work in good faith to negotiate a definitive agreement," the company said in a news release.
"Any definitive agreement would be subject to the completion of due diligence, approval of both The Andersons and Skyland's board of directors, negotiation of documents, and any applicable (including regulatory) approvals. As a result, there can be no assurance that the parties will enter into a definitive agreement or that the proposed transaction will be completed."
The Andersons owns and operates 125 facilities around the world. That includes 82 grain trade operations with 168 million bushels of grain storage capacity in the U.S., Canada, Switzerland and the United Kingdom.
The company also operates four ethanol plants in Indiana, Iowa, Michigan and Ohio, totaling about 488 million gallons of production capacity, 1.2 million tons of feed production and 124 million pounds of corn oil production.
The Andersons also runs 39 nutrients and industrial facilities in the U.S., producing 1.9 million tons of nutrients, specialty products, industrial inputs and corncob-based products.
Skyland was previously owned by Archer Daniels Midland and has about 174 million bushels of grain-storage capacity.
Bill Krueger, chief operating officer for The Andersons, said the deal would be good for farmers across the country.
"Better connecting the North American ag supply to producers and providing increased access to the best markets for their products helps them be more competitive and positions us as a partner in helping make their operations successful," Krueger said in a statement.
Skyland CEO Pete Goetzmann said if a deal is finalized it would help expand opportunities for the farmers the company serves.
"Our two companies are aligned in our vision to serve our local producers and expanded customer base," he said in a statement.
"This proposed transaction provides an opportunity to bring more value to our farmer-owners and to compete more effectively in the marketplace, while positioning us for the future through globally connected supply chains."
Todd Neeley can be reached at todd.neeley@dtn.com
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