Marubeni to acquire Gavilon for $3.6 billion
May 29, 2012
OMAHA — Marubeni Corp., a Japanese trading company, has agreed to acquire Gavilon Holdings, L.L.C. for $3.6 billion.
“We are pleased that our strategic review process has resulted in an agreement to become a wholly owned subsidiary of Marubeni,” said Greg Heckman, president and chief executive officer of Gavilon. “As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand.
“Marubeni and Gavilon share a similar focus on customers, employees, growth and risk management, and we anticipate minimal changes to our organization and operations. We are excited by the opportunities this transaction will create and look forward to what we will achieve together.”
Marubeni’s grain business operates as part of its Food Materials Division. The division is the top trader among general trading companies with annual grain trading volume of about 20 million tons, Marubeni said, and the company is bolstering efforts to develop sales operations worldwide, along with measures targeting grain production markets. Additionally, the company has a framework for grain procurement composed of diverse production sites worldwide, and is developing global sales operations. Leveraging internationally competitive grains, the division not only provides Japan with a stable grain supply, but is also building a structure for flexibly supplying grain to meet growing global demand.
Privately-held Gavilon L.L.C., one of the largest grain, processing and merchandising companies in the United States, was established in 2008 with the sale by ConAgra Foods Inc. of its Trading and
Merchandising business to Ospraie Management L.L.C. Special Opportunities Fund in a $2.1 billion transaction. With the sale, the business was renamed Gavilon L.L.C. Ospraie remains the principal owner of the business.
Since it became a privately-held company, Gavilon has grown rapidly with a number of significant actions, including acquisitions and capital expenditures. Gavilon operates 300 facilities and regional offices worldwide. The company estimated its business mix, as measured as share of earnings, at 62% grain and ingredients (mostly origination, storage and distribution), 20% energy (storage, transportation and logistics) and 18% fertilizer (distribution).
According to the 2012 Grain & Milling Annual, Gavilon was the third largest grain storage company in the United States.