Ag Growth International (AGI) has acquired Indian company Milltec Machinery for around $115 million, with the potential for an additional $40 million based on the achievement of earnings before interest, tax, depreciation and amortization (EBITDA) targets.
Milltec is headquartered in Bangalore, India and is a manufacturer of rice milling and processing equipment in India.
The move means AGI can move into the rice processing systems space with a complete product line in India.
It also adds a complementary product offering and customer base for AGI and provides a platform for further consolidation in India. AGI is also able to take advantage of greater access to the broader Asian markets.
Growth drivers were identified and include rising incomes in India, which has led to consumers choosing to purchase higher quality rice products and rapidly increasing the size of the rice processing market.
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Milltec recently expanded into pulses and seed equipment, adding another lever for growth in the region.
The additional access to capital that AGI provides will also support domestic and export growth.
“The acquisition of Milltec marks an important step for AGI as we expand into rice equipment and enter the large, and rapidly growing, markets in India,” AGI President and CEO Tim Close said.
“Milltec now forms the foundation of our platform in India as we build a footprint to deliver our complete 5-6-7 strategy. India is one of the world’s largest producers and consumers of all agriculture products and will invest heavily in the infrastructure required to facilitate the daily lives of over a billion people.
“Milltec joins AGI at an inflection point in its journey from a small regional company to a Pan-India business. We will invest and collaborate to accelerate this journey. The founders of Milltec, and a very talented team, are joining AGI in the pursuit of our goal to supply the world’s food infrastructure,” he said.
Click here to read more about AGI’s 5-6-7 strategy.