AG Growth Income Fund

AG Growth Income Fund

November 14, 2007 08:30 ET

Ag Growth Announces Strategic Acquisition

WINNIPEG, MANITOBA--(Marketwire - Nov. 14, 2007) - Ag Growth Income Fund (TSX:AFN.UN) ("Ag Growth" or the "Fund") announced today it has entered into an agreement to acquire 100% of the outstanding shares of Union Iron, Inc. ("Union Iron") ( and the shares and assets of certain related companies of the Decatur, Illinois based company, for USD $20.2 million. The purchase price may increase by up to $3.1 million based on the achievement of EBITDA targets of USD $4.5 million for 2008, USD $5.0 million for 2009 and USD $5.0 million for 2010 or a cumulative target of USD $14.5 million for those same three years.

Union Iron manufactures several lines of material handling and storage equipment for the commercial and large-farm market. Its catalog includes bucket elevators, drag conveyors, screw conveyors, truck probes, towers and trusses, distributors, facility load out equipment and corn degerminators. Union Iron, since 2004, has been developing a line of temporary grain storage systems and accessories which has experienced substantial growth over the past four years. Union Iron provides Ag Growth with key products lines to complement the Hi Roller brand acquired by Ag Growth in 2006.

Annual revenues from Union Iron's business over the last three years have averaged USD $17.4 million and average annual EBITDA for that same period was USD $3.5 million. Union Iron's strong operating results, combined with low historical CAPEX requirements, result in an acquisition that management believes will be immediately accretive to the Fund.

Rob Stenson, Chief Executive Officer of the Fund, stated, "We are extremely excited to add Union Iron to the Ag Growth group of companies. Union Iron is a recognized player in the commercial grain handling market and its Union Iron and HSI brands are an excellent complement to our Hi Roller brand." Mr. Stenson continued, "Union Iron captures so many of the product lines we desired to add to our commercial and large-farm grain handling catalog. With the continuing growth in grain production worldwide, the modernization of grain handling infrastructure, and our focus on international sales growth, we now have a very impressive, full-line catalog that will enhance our opportunity to grow this part of our business. We are very impressed with the management team at Union Iron and we look forward to growing with them in the future."


TD Commercial Banking and CIBC Commercial Banking have agreed to provide debt financing to fund the acquisition subject to customary closing conditions. Terms and conditions of the financing are consistent with the Fund's existing credit agreement.

Company Profile

Ag Growth is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories and grain aeration equipment. Ag Growth's sales, marketing, and distribution system includes approximately 1,400 dealers and distributors in 48 states and nine provinces.

Forward-Looking Statements

This news release may contain forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance and business prospects, and opportunities of the Fund. Forward-looking statements contain such words as "anticipate", "believe", "continue", "could", "expects", "intend", "plans", "will" or similar expressions suggesting future conditions or events. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including changes in national and local business conditions, changes in the agricultural industry including changes in crop yields, industry cyclicality and seasonality, changes in the exchange rate between the Canadian and U.S. dollar, competition, changes in governmental agricultural policies, incorrect assessment of the value of acquisitions including the proposed Union Iron acquisition and failure to complete or realize the anticipated benefits of acquisitions including the proposed Union Iron acquisition. These risks and uncertainties are fully described in our 2007 Annual Report and our Annual Information Form. Further information about these and other risks and uncertainties can be found in these and other disclosure documents filed by Ag Growth Income Fund with the securities regulatory authorities, available at

Contact Information

  • Ag Growth Income Fund
    Steve Sommerfeld
    Investor Relations
    (204) 489-1855