World Grain - March 2012 - 16

newsreview
Nisshin to acquire Miller Milling Co.
TOKYO, JAPAN — Nisshin Flour Milling Inc., a subsidiary of Tokyo-based Nisshin Seifun Group Inc. (NSGI), has reached an agreement to acquire Miller Milling Co., Bloomington, Minnesota, U.S. Miller Milling is the 12th largest ﬂour milling company in the United States, according to the Grain & Milling Annual 2012, published by Sosland Publishing Co. The company also is the newest company wholly dedicated to ﬂour milling among the largest 24 companies in the industry. Miller was established in 1985 by John C. Miller, who is president and chief executive ofﬁcer of the company. Miller Milling operates two U.S. ﬂour mills, one in Fresno, California, U.S., and the second in Winchester, Virginia, U.S. The company has daily milling capacity of 27,500 cwts. While the total enterprise value was not disclosed, Nisshin said, in a Tokyo Stock Exchange ﬁling, it was paying $122 million for the outstanding shares of Miller Milling. Nisshin did not disclose other details of the purchase price, including assumed long-term debt. Nisshin said a new subsidiary will be incorporated in the United States to acquire the ownership of Miller with Nisshin Flour Milling owning 80% of the new subsidiary and NSGI owning the remaining 20%. The transaction is expected to close in March. “The acquisition of Miller Milling will enable NSGI to take advantage of the highly experienced and technical capabilities of Miller Milling that operates its core business centered on durum semolina, bakery ﬂour and tortilla ﬂour products,” Nisshin said. “NSGI plans to further expand its presence in the U.S. by expanding Miller Milling’s existing operations as a part of the group organization into new markets. Toward that goal, NSGI will utilize the group’s outstanding product development, techniques and capabilities to supply wheat ﬂour that is consistent in quality.” Nisshin said the acquisition represents a longstanding priority to expand overseas. Indeed, the Miller Nisshin Flour website has candidly spelled out this ambition for longer than a year. “To cope with this globalized business environment and factor its implications into its medium- and long-range planning, Nisshin Flour Milling Inc. is in the process of building an international ﬂour milling network, with bases already operating in Canada and Thailand,” the site says. Nisshin, Japan’s largest ﬂour milling company, ﬁrst entered the North American milling market in 1989 with the acquisition of Rogers Foods, Ltd., a ﬂour milling operation based in Armstrong, British Columbia, Canada. More recently, a second milling operation was opened by Rogers in Chilliwack. The Rogers’ business has combined daily milling capacity of 11,375 cwts. “NSGI is conﬁdent that its acquisition of Miller Milling Co. will realize synergies both with Rogers Foods and the other group companies that will serve to greatly accelerate the expansion of its presence in the U.S. market,” Nisshin said. In addition to a signiﬁcantly enlarged presence in the U.S. milling market, Nisshin said the Miller Milling acquisition will strengthen the Japanese company’s “valuable wheat-related know how,” important since the United States is the largest wheat supplier to Japan. “Through this (gained) experience, the group will obtain signiﬁcant beneﬁts and capabilities for further expanding its ﬂour milling operations in the global market,” Nisshin said. Miller said the acquisition offers the company he established the best route forward for successful expansion. “We have been trying for some time to put in place a plan that prepares Miller Milling for future growth and success,” Miller said. “My partners and I believe that combining Miller Milling with Nisshin Flour Milling is the best way to accomplish that. Our responsibilities to our shareholders, our customers and our employees lead us to conclude that the best path forward would be to take advantage of the many strengths a company like Nisshin can bring to our business while at the same time ensuring and even strengthening the competitive marketplace our customers’ currently enjoy. I know that Nisshin shares our belief that Miller Milling is well positioned for growth and expansion. And I am especially pleased Nisshin will rely on current Miller Milling management and employees to take Miller Milling to the next level. Our acquisition by Nisshin is positive in many ways for Miller Milling’s shareholders, customers and employees.” Not included in the transaction is Tablex Miller, S.A. de C.V., a durum mill located in Navojoa, Sonora in Mexico. A joint venture partly owned by Miller Milling, the company operates a durum mill with 5,000 cwts of daily capacity. The Nisshin announcement ends what likely was the longest hiatus ever in merger and acquisition activity in U.S. ﬂour milling. The last major transaction in the industry was the September 2001 announcement that CHS Inc. and Cargill were establishing the milling partnership that has become Horizon Milling L.L.C.
March 2012 / World Grain / www.World-Grain.com

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World Grain - March 2012

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