Linamar acquires seeding expert Bourgault Industries, significantly bolstering its agriculture business
Linamar Corporation announced Dec. 20 that it has reached an agreement to acquire Bourgault Industries Ltd. of St. Brieux, Saskatchewan, further enhancing its Industrial segment’s diversified offerings and advancing its position as a leading short-line agriculture equipment manufacturer. Bourgault is a world-class agriculture equipment manufacturer regarded as a market and technology leader in broad acre seeding. Linamar’s existing agricultural brands include harvesting specialist MacDon, and tillage and crop nutrition expert Salford. Bourgault is highly complimentary to these existing divisions and enables Linamar to increase its market position as it now possesses a full lineup of products in the broader crop production cycle, from field preparation, to seeding, crop nutrition, harvest and post harvest.
The transaction, representing the purchase of 100% of the equity interest of Bourgault, is for CAD $640 Million, subject to customary adjustments. Bourgault will become part of a new Linamar Agriculture division within the broader Industrial Segment. The industrial segment also includes Skyjack, a manufacturer of aerial work platforms. This new Agriculture group will continue to operate the shortline brands of MacDon, Salford, and Bourgault independently while maximizing overall growth opportunities globally, better enabling future Agriculture technologies, improving the overall farm customer experience, as well as enhancing product support. The acquisition includes Bourgault’s Highline Manufacturing division which produces hay handling and livestock feeding equipment, as well as roto-moulding producer Free Form Plastics.
“We are thrilled to welcome Bourgault Industries into the Linamar family. Bourgault is another Canadian manufacturing success story that draws many similarities to Linamar’s history of entrepreneurism and technical innovation. The Bourgault name is synonymous with broad acre agricultural seeding innovation and offers a tremendous opportunity for Linamar to further diversify and grow our agriculture platform, as well as our Industrial segment overall,” Linda Hasenfratz, Linamar Executive Chair and CEO said. “It also further enhances our powerful synergistic diversification strategy whereby our Industrial businesses benefit from purchasing leverage, global footprint and access to industry leading lean manufacturing expertise from our Mobility businesses, while our Mobility business benefits from the strong cash generation and brand expertise of our Industrial businesses. Together our business model provides an excellent formula for consistent, sustainable growth with strong margins and excellent balance sheet strength.”
“Bourgault is our third strategic acquisition of 2023, following two previous transactions within the Mobility sector earlier this year,” Jim Jarrell, Linamar’s President and COO explained. “This work is the result of a well-defined strategy to grow our business with diversified product offerings, creating a larger potential addressable market and new pathways for future revenue growth. Bourgault strengthens our short-line agriculture platform with strong brand recognition, a portfolio of advanced seeding technologies and an operational footprint that will enable us to better serve the core Western Canadian and US Midwest farm base.”
“Bourgault was started by my father and has a rich history in agriculture. The Bourgault family is incredibly proud of the legacy we have created both here in in St. Brieux, Saskatchewan, but also around the world. We are excited to have our team of over nine-hundred people in Saskatchewan, and over one thousand worldwide, join the Linamar family. Linamar has a proven track record for not only successfully integrating acquired companies, but also for their manufacturing expertise and business execution overall. I am confident Linamar will take the Bourgault brand to new heights in its next chapter, while also allowing Bourgault to maintain and build upon its deep-rooted connections to its stakeholders in Saskatchewan and around the world,” added Bourgault President Gerry Bourgault.
The transaction is subject to customary regulatory approvals and expected to close in Q1 2024. A new term loan facility will fund the acquisition under similar terms and conditions as Linamar’s existing revolving credit facility. The term loan will mature in three years to closely align to the maturing of Linamar’s existing revolving credit facility.