MAUMEE, OHIO — In a move designed to strengthen and broaden its grain business, The Andersons, Inc. on Oct. 15 reached an agreement to acquire the 67.5% of Lansing Trade Group, L.L.C. it does not already own for cash and stock currently valued at a total of approximately $305 million.

As part of the agreement, The Andersons will pay approximately $175 million in cash for the business. The Andersons also said it will issue unregistered shares to current Lansing equity holders presently valued at approximately $130 million. The transaction will result in the consolidation of Thompsons Limited of Ontario and related entities as they have been jointly owned by Lansing and The Andersons.

The Andersons said it will assume approximately $166 million of long-term debt, consisting of up to $130 million from Lansing and about $36 million from Thompsons. The implied purchase price is less than nine times EBITDA for the 12 months ended Aug. 31, 2018.

Based on the current market price of The Andersons shares, The Andersons 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.

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 is a company that we know very well after 15 years of partnership,” Patrick E. Bowe, president and chief executive officer, said during an Oct. 16 conference call with analysts. “By fully acquiring and merging Lansing into The Andersons, we will create a business of complementary grain and ingredient assets and trade flow with greater scale that significantly expands our presence in the agricultural marketplace.”

Mr. Bowe said the fact that the Lansing assets don’t overlap with The Andersons’ assets geographically is an added benefit of the transaction.

“We also want any acquisition to improve our ability to meet customer needs, and Lansing enhances the scale and scope of our trading activities by growing our trading operations and allowing us to trade new commodities,” he said. “In addition, Lansing’s highly complementary customer base will give us opportunities to sell our Freedom risk management tools to more farmer customers. The acquisition also increases our footprint and penetration in high-growth specialty food and feed ingredients markets, creating the opportunity to diversify our activities outside of traditional products and geographic regions. The combined scale will allow us to drive efficiencies across these supply chains. We expect the transaction to be accretive within a year. The transaction also provides an attractive return on invested capital with a good payback period, thus, meeting all of our financial criteria.”

After closing, Lansing will be integrated with The Andersons’ Grain Group. The combined operation will be jointly led by Corey Jorgenson, president of The Andersons’ Grain Group, and William E. Krueger, president and c.e.o. of Lansing Trade Group. Mr. Bowe said Mr. Krueger will run the commodity trading part of the business while Mr. Jorgenson will run originations, which includes working on the front-end merchandising with farmers. Mr. Krueger and Mr. Jorgenson will work together to co-manage the food business, Mr. Bowe said.

“What Lansing brings to The Andersons is a larger grain and feed ingredient merchandising platform with a larger Western presence that’s very complementary to The Andersons’ mostly Eastern footprint,” Mr. Krueger said. “We’ve concentrated more on merchandising and trading than on operating grain facilities. We’re also merchants of DDGs and merchandise a total of approximately 4 million tons of feed ingredients annually. We have a successful pet food business, specialty grain business and frac sand business that handles nearly 3 million tons annually. Our gross profit for the 12 months ended Aug. 31, 2018, was split 45% in our grain division; energy at 30%; and feeding specialty ingredients at 25%.”

According to Sosland Publishing Company’s 2018 Grain & Milling Annual, Lansing Trade Group has 22 grain storage facilities with 52 million bus of total licensed grain storage capacity.

“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,” Mr. Jorgenson said.

The Andersons has 44 grain storage facilities with 144.306 million bus of total licensed grain storage capacity, according to the 2018 Grain & Milling Annual.

Founded in Lansing, Mich., in 1922, 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, Kas., Lansing employs approximately 550 associates in more than 20 facilities across the United States and Canada and a dozen other offices, including in London and Singapore.