Tate and Lyle, the British Company that owns Western Sugar Co., has agreed to a grower buy out offer of $78 million.
Randon Wilson, the cooperative attorney putting the purchase package together on behalf of growers in Colorado, Nebraska, Wyoming and Montana, said it is just a matter of the growers coming up with the money.
Contacts for the grower buy-out money have been made to such banks as Dutch bank Rabo in New York, GE Capital, Wells Fargo, and US Bank. The Rocky Mountain Beet Grower Co-op needs to find financing for two thirds the purchase price--$52 million.
They also need to come up with about $26 million for their portion, which will be based on payments of about $180 per acre. "The bankers in Nebraska, Montana and Wyoming
are generally supportive," Wilson said of local financing.
The proposed deal calls for the purchase of six factories-two each in Colorado and Nebraska and one each in Wyoming and Montana.
"We're getting right down to the commitments," Wilson said today. "We prepared a financial model of what we could pay. If they won't accept it, we won't buy," Wilson continued.
Wilson added that the figure of $78 million was not a true value. They asked for $150 million. "But we can only pay $78," he added. He said there will be an "earn-out" provision in the contract stipulating that growers will have to pay an additional $25 million if the sugar price situation improves over the next five years.
"Tate and Lyle agreed to work with us to get it done. We're happy with what we've done," he added.