ADM Acquires Prairie Pulse Inc. in Saskatchewan, Canada

ADM, a publicly listed multinational based in Chicago, United States, acquired Prairie Pulse Inc., a pulse – peas, lentils, beans, and chickpeas – processing company based in Saskatchewan, Canada, on July 5, 2023. ADM is a food processing and commodities trading corporation, and this acquisition doubles its pulse capacity in Canada.

Transaction Summary

The Facts of the Acquisition

  • Target: Prairie Pulse is a lentil and pulse processor based in Saskatchewan, Canada, since 1995. It sources and processes local products and sells them in Canada and the United States.
  • Acquirer: ADM is a U.S. multinational food processor and commodities trader with worldwide reach. It is publicly listed on the New York Stock Exchange (NYSE: ADM) and is an S&P 500 company.

Our Take on the Acquisition

Prairie Pulse (target), with revenue of up to USD $5 million, is a relatively small acquisition for ADM (acquirer), with revenues of USD $101.55 billion. The acquisition represents less than a 0.01% increase in revenue for ADM. It may be that ADM simply acquired Prairie Pulse to secure the supply of food commodities relevant to its business interests. Since Saskatchewan is the largest production area of lentils in the world, ADM would want to expand its reach in the area, and Prairie Pulse is an appropriate company for direct interaction with farmers in the area. ADM may also be looking to expand Prairie Pulse’s capacity.

The Transaction

Date:July 5, 2023
Purpose: To secure supply for raw materials required for a key business segment.
Acquirer’s Statement:Aaron Brown, commercial manager at ADM – “Everything at ADM starts with the farmer. Their success is our success, and we’re excited to strengthen our relationships with Canadian pulse growers through the acquisition of Prairie Pulse. This addition also expands our capabilities to meet the needs of our downstream customers, who are increasingly looking at pulses as protein sources for both human and animal nutrition products.”

Target/Seller: Prairie Pulse Inc.

Company Information

Target:Prairie Pulse Inc.
Industry: Food and Beverage Manufacturing
Employees:11-50 (Self-published on LinkedIn)
Locations:Head Office and Processing Facility: 700 Campbell Drive, PO Box 399, Vanscoy, Saskatchewan, Canada

Product Information 

Products:Chickpeas – A high-protein member of the pea family grown annually
Lentils – A high-protein pulse that is dried and then soaked and cooked before eating
Peas – Small, green, edible seeds grown in winter to early summer
Market Reach:Canada
United States

Financial Information 

Revenue:Up to USD $5.0 million (Unconfirmed Source: ZoomInfo)
Revenue per Employee:Between USD $100,000 and USD $500,000 (i.e., USD $5 million / 50 employees = USD $100,000 to USD $5 million / 10 employees = USD $500,000 – estimated based on the self-published number of employees and the revenue from ZoomInfo)

Did You Know?

Canada is the largest lentil producer and exporter in the world, producing 2,092,136 (metric) tonnes a year, or 45% of total production. It’s followed by India, which produces 1,620,000 tonnes, and the United States, producing 381,380 tonnes. The province of Saskatchewan produces 95% of Canada’s lentils. The country began growing lentils in the 1970s and now has more than 5,000 active lentil farmers.

Target/Seller Overview: Prairie Pulse Inc.

Prairie Pulse is a locally operated lentil and pulse crop processor in Vanscoy, Saskatchewan, Canada. Its operations in Vanscoy include 12,000 tonnes of bulk storage, cleaning, milling, sorting, sizing, and bagging. The pulse dehulling and splitting facility transforms lentils, chickpeas, and peas into shelf- and food-ready products. These are bought directly from Canadian farmers and delivered to the facility to be cleaned, milled, and packaged for national and international customers.

Prairie Pulse Inc. is based in Saskatchewan, Canada.

Buyer/Acquirer: ADM

Company Information

Industry: Food and Beverage Manufacturing
Type:Publicly listed company
Employees:42,001 (Source: Pitchbook)
Locations:Head Office: 77 West Wacker Drive, Suite 4600, Chicago, Illinois, United States
Asia-Pacific Regional Headquarters: 230 Victoria Street #11-08, Bugis Junction Towers, Singapore
Asia Regional Headquarters: B5 Building, 180 Yizhou Road, Xuhui District, Shanghai, China
Europe and Africa Regional Headquarters: A-One Business Center, La Pièce 3, 1180 Rolle, Switzerland
Latin America – Animal Nutrition: City Center Building, 03940, Av. de los Insurgentes Sur 1602, Crédito Constructor, Benito Juárez, 03930 Ciudad de México, CDMX, México
Latin America – Agriculture Services and Oilseeds: Andres Bello 10, Polanco, Polanco IV Secc, Miguel Hidalgo, 11560 Ciudad de México, CDMX, México
North America Regional Headquarters: 4666 Faries Parkway, Decatur, Illinois, United States
South America Regional Headquarters: Av. Roque Petroni Júnior, 999 – Jardim das Acácias, São Paulo, Brazil

Product Information 

Products:Acidulants – Acidic food additives that give a tart, sour, or acidic flavor to foods
Alternative Proteins – Plant-based and food-tech alternatives to animal protein
Beans, Pulses, Nuts, and Seeds – Plant-based sources of protein
Botanicals – Plants valued for their medicinal or therapeutic properties, flavor, and/or scent
Colors – Artificial color additives to make up for color or enhance natural colors
Edible Oils – Plant, animal, or microbial-origin fats that are liquid at room temperature
Flavors – Products added to food to give a different or stronger taste and/or smell
Flours – Grain-based flours mainly used for making breads, cookies, cakes, pastries, and other baked goods
Grains – The harvested seed of grasses such as wheat, oats, rice, and corn
Food Bases and Marinades – Concentrated purées of meat, poultry, seafood, vegetables, or herbs and spices made from techniques like caramelizing
Microbiome Solutions – Health and wellness supplements
Specialty Health Solutions – Plant-based ingredients, including dietary fibers and nutritional oils
Starch – A natural part of most plants that is used to add texture, tenderness, and stability to other products
Sweeteners – Sugar substitutes and complementary ingredients
Texturants – Ingredients used to create textures, thickness, and stability
Feed – Agricultural foodstuff used to feed domesticated livestock
Ethanol – Renewable fuel made from corn and other plant materials
Bioenergy – Renewable energy derived from recently living organic materials known as biomass
Market Reach:Worldwide

Financial Information 

Market Cap:USD $44.12 billion
Revenue:USD $101.55 billion (Source: Pitchbook)
Revenue per Employee:USD $2.42 million (i.e, USD $101.55 billion / 42,001 employees = USD $2.42 million – estimated based on the number of employees and revenue from Pitchbook)
EBITDA:USD $6.36 billion
P/E Ratio:10.16
EV/EBITDA Ratio:9.42

What Are Pulses?

Pulses are annual crops that produce between one and 12 grains or seeds. The term is limited to crops harvested as dry grains, differentiating them from vegetable crops harvested while green. Broadly, there are 10 main types: dry beans, dry broad beans, dry peas, chickpeas, cow peas, pigeon peas, lentils, Bambara beans (like chickpeas), vetches, and lupins. Plus, minor pulses that don’t fall into these categories. They are part of the legume family – plants like peas or beans, which have their seeds in a pod. The main difference between pulses and legumes is pulses are dried before they’re eaten. Fresh peas, for example, are  legumes and dried peas are pulses.

Buyer/Acquirer Overview: ADM

Archer-Daniels-MidlandCompany, or ADM, is a U.S. multinational food processor and commodities trader founded in 1902 and based in Chicago, Illinois. It operates more than 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, animal feed, and pet feed markets. Categories for human consumption include bakery, confectionery, dairy, dietary supplements, and pharmaceutical. The company provides agricultural storage, transportation, and logistics services through two of its subsidiaries: American River Transportation Company and ADM Trucking Inc.

ADM is a U.S. multinational food processing and commodities trading company.
ADM connects crops and markets in 200 countries and operates in North America, South America, Europe, the Middle East, Africa, and Asia Pacific.

Previous Acquisitions by ADM

  • Comhan (2022) – A flavor distributor based in South Africa
  • Flavor Infusion (2021) – A producer of natural, organic, and artificial flavors for the food and beverage industry, based in California, United States
  • Deerland Probiotics & Enzymes (2021) – A formula and contract manufacturer of enzyme and probiotic-based dietary supplements, based in Georgia, United States
  • The Pound Bakery (2021) – The company specializes in wholesale dog treat sales and private-label pet treat manufacturing, based in Illinois, United States
  • NutraDine (2021) – A premier provider of private-label pet treats and supplements. The company is based in Colorado, United States
  • PetDine (2021) – PetDine helps to create pet products and services for business partners through consultation, innovation, and improving the lives of pets. The company is based in Colorado, United States
  • Florida Chemical Company (2019) – A company specializing in citrus-based flavors and fragrances, based in Florida, United States
  • Neovia (2018) – A global provider of value-added animal nutrition solutions, based in France.
  • Chamtor SA (2017) – Chamtor SA transforms and processes wheat into ingredients for food, animal feed, and technical applications in France and internationally

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