Andersons (ANDE) Buys Assets of Auburn Bean and Grain - Analyst Blog

The Andersons, Inc. (ANDE) has acquired the assets of Auburn Bean and Grain, including six grain elevators and four farm agronomy centers in Michigan to improve its storage capacity and volume for grain and nutrient businesses.

The buyout offers a total grain storage capacity of about 18.1 million bushels, and 16,000 tons of dry and 3.7 million gallons of liquid nutrient capacity. The facilities having multiple rail interchange agreements with all of the eastern Class I railroads CSX, NS and CN, offers further benefits to Andersons.

Additionally, the acquisition is a geographic fit between Andersons’ Michigan assets and Thompsons joint venture in Ontario. The deal will also add more than 80 employees to Andersons’ current workforce of roughly 3000 employees.

Andersons’ storage capacity declined to 139 million bushels in the second quarter of 2014 from 141 million bushels in the prior-year quarter. The acquisition will increase the storage capacity of the company’s grain group by about 13%.

Andersons’ strategy to grow its grain business entails geographic expansion, enhancement of existing facilities, acquisitions and grain handling agreements. In July, Andersons, in association with Lansing Trade Group, finalized the acquisition of Thompsons Limited to provide additional geographic and climatic diversification and strengthen its presence in the edible bean market.

In addiition, Andersons acquired the assets of Cycle Group, Inc in Dec 2013 to increase its production and distribution capabilities in the high-value markets of the granular business.

Maumee, OH-based Andersons is a diversified company operating in six different business segments ranging from buying, selling and storing grain to leasing railcars and running retail stores catering to the latest home hardware needs.

Andersons carries a Zacks Rank #1 (Strong Buy).

Other favorably ranked stocks in the same industry are Bunge Limited (BG), Limoneira Company (LMNR) and Cosan Ltd. (CZZ). While Bunge and Limoneira sport a Zacks Rank #1 (Strong Buy), Cosan holds a Zacks Rank #2 (Buy).

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