The Andersons Inc. announced Oct. 15 that it has entered into a merger agreement with Lansing Trade Group LLC, its longtime affiliate, to acquire the 67.5% of Lansing equity that it does not already own. The cash and stock deal is currently valued at a total of approximately $305 million.

In addition to paying approximately $175 million in cash, the company will issue unregistered shares to current Lansing equity holders presently valued at about $130 million, subject to certain closing adjustments and changes in the share price of Andersons stock, respectively.

The transaction will also result in the consolidation of Thompsons Ltd. of Ontario and related entities as they have been jointly owned by Lansing and The Andersons.

The Andersons will assume approximately $166 million of long-term debt, consisting of up to $130 million from Lansing and about $36 million from Thompsons.

Based on the current market price of Andersons shares, the company would issue approximately 4.4 million unregistered shares, including some shares to replace existing unvested incentive compensation and fund retention payments, which would represent approximately 13% of revised new total outstanding shares, according to the announcement.

The Andersons expects the transaction to be accretive to earnings per share within the first full year after closing and to achieve annual run rate cost synergies of at least $10 million by year-end 2020. The transaction is expected to close before Jan. 31, 2019, subject to Lansing shareholder approval and customary government and regulatory approvals.

Lansing will be integrated with The Andersons' Grain Group, and the combined operation will be jointly led by Corey Jorgenson, president of The Andersons Grain Group, and Bill Krueger, president and chief executive officer of Lansing Trade Group.

"This acquisition creates a grain business of highly complementary assets with greater scale that significantly expands our reach in the agricultural marketplace," said Pat Bowe, The Andersons president and CEO. "We firmly believe the union of these core agricultural businesses will allow us to compete more successfully, provide greater value across an expanded platform and grow more profitably. The new larger organization will provide significant career opportunities for our employees."

Krueger added, "Combining our talented teams is a very compelling opportunity to unlock potential by bringing together the best of each business. We will be able to provide Freedom pricing tools to the current Lansing producers while leveraging The Andersons' facilities to merchandise more bushels to enhance our ability to supply our consumptive demand base. In effect, we will be developing a more robust North American supply chain."

"The full integration of Lansing will accelerate execution of our strategic intention to grow income from originations and managing grain assets, expand trading and risk management services and broaden our food ingredients and specialty grains and feed ingredients platform," Jorgenson said.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC are serving as financial advisors to The Andersons, with Kirkland & Ellis LLC acting as legal counsel. Citigroup Global Markets Inc. is serving as a financial advisor to Lansing Trade Group, with Husch Blackwell LLP acting as legal counsel.

Founded in 1947 in Maumee, Ohio, The Andersons is a diversified company rooted in agriculture that conducts business across North America in the grain, ethanol, plant nutrient and rail sectors.

Founded in 1922 in Lansing, Mich., Lansing Trade Group is focused on the movement of physical commodities, including grains, feed ingredients, energy products and freight within North America and internationally. Presently based in Overland Park, Kan., it employs around 550 associates in more than 20 facilities across the U.S. and Canada and a dozen other offices, including in the U.K. and Singapore. Lansing owns approximately 55 million bu. of grain storage space and traded more than 1 billion bu. of grain in 2017.