CHICAGO — Archer Daniels Midland Co. has signed an agreement to acquire Crosswind Industries, Inc., a Parkville, Mo.-based producer of dry-expanded, dual-texture, semi-dry and semi-moist treat products for pets.
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| Brent Fenton, president of ADM’s Animal Nutrition business |
“The global pet food industry represents a strong opportunity for strategic growth, especially for a company with the global resources of ADM,” said Brent Fenton, president of ADM’s Animal Nutrition business. “ADM already sells more than 50 ingredients and commodities that are used by more than 70% of all pet food companies in North America. Now, we’re taking the next step with the addition of Crosswind Industries to our global network. With five production facilities and a wide range of successful products, Crosswind represents a strong opportunity to expand our capabilities, and a great fit not just with the Animal Nutrition business, but across ADM’s wider portfolio of ingredients, colors and flavors for pets. We’re looking forward to combining Crosswind’s operations and products with our own to provide customers an even broader array of products and services.”
Crosswind Industries manufactures contract and private label pet treats and foods, as well as specialty ingredients. Its 300 employees operate five processing lines across five Kansas facilities, with nine “ready for retail” packaging lines.
“Since early 2015, we have announced or completed several organic growth and improvement projects for our Animal Nutrition business across the U.S., as well as overseas,” Mr. Fenton said. “We’ve also been active on the M.&A. front, with the acquisition of Lyrco Nutrition and the creation of our Alliance Liquid Feeds joint venture. Now, with the addition of Crosswinds, we are continuing our efforts to grow our business so as to set the industry standard and ensure that we are continuing to meet growing customer needs for quality animal nutrition products.”
ADM anticipates closing the transaction in the coming weeks.
This is the latest in a series of ADM expansion and acquisition projects. In December 2016, ADM announced its plans to expand overall grind and finishing capacity for sweeteners and starches at its corn wet mill facilities in Turkey and Bulgaria. In November, ADM announced plans to build a new, modern feed facility to replace its current operations in Quincy, Ill. The new facility will include expanded warehouse space, enhanced capability to serve increased demand for the company’s products, a dedicated feed line for non-medicated product, automated packaging and process controls, and pressed tubs for multiple species. It is expected to be completed in mid-2018.
The decision to broaden its presence in the pet food industry comes at a time when several other global companies are adopting a similar strategy. A day before ADM’s announcement, McLean, Va.-based Mars Inc. entered an agreement to acquire all of the outstanding shares of pet health care company VCA Inc. for $93 per share, or a total value of approximately $9.1 billion including $1.4 billion in outstanding debt. With the addition of VCA, the company’s pet care segment will account for more than half of Mars’ total sales, eclipsing its chocolate and gum business, which includes such brands as M&M’s, Snickers, Skittles and Doublemint.
The moves by ADM and Mars come nearly two years after Orrville, Ohio-based J.M. Smucker Co. acquired Big Heart Pet Brands in a cash and stock transaction valued at approximately $5.8 billion.
