The Andersons, Inc. ( ANDE - Analyst Report ) has agreed to buy all the assets of Mt. Pulaski Products, LLC which makes products from corn cobs. The transaction, the terms of which were not disclosed, is expected to close in the fourth quarter.

Mt. Pulaski, Illinois-based Mt. Pulaski Products is a leading corn cob processor which, through advanced technologies, produces high quality and eco-friendly corn cob products and materials. It operates two facilities in central Illinois.

After the completion of the acquisition, the new assets will be included in the Turf and Specialty Group, Cob Division. During second-quarter 2012, the segment’s revenues rose 5.5% year over year to $43.8 million.

With this acquisition, Andersons will become the owner of multiple corn cob product mills. As a result, the new facilities together with the company’s facility at Delphi, Indiana, will position it as the sole leader of cob processor as well as product manufacturer.

Moreover, Andersons’ raw corn cob supply will be doubled as the mills are best positioned around the seed corn production areas in Illinois. Therefore, the company will get the benefit of an enhanced cob product portfolio and will be able to provide more improved services to a wider client base.

The decision to buy the assets fits in well with Andersons’ strategy to expand its geographic footprint into potential new markets and enhance product portfolio which will boost its revenues. Earlier, in May 2012, the company completed the acquisition of an ethanol facility in Denison, Iowa, now owned by The Andersons Denison Ethanol LLC.

In January, Andersons purchased the manufacturer and wholesale marketer of specialty agricultural nutrients and industrial products, New Eezy Gro, Inc. It was integrated into the company’s Plant Nutrient Group segment.

However, the prevailing severe drought condition in the U.S. will affect Andersons negatively. In addition, lower wheat production in the second half of the year, resulting in lower wheat storage will be headwind for the company.

During the second quarter, Andersons’ reported earnings of $1.56 per share, missing the Zacks Consensus Estimate of $1.64. Total revenues decreased 1.7% year over year to $1.32 billion, falling behind the Zacks Consensus Estimate of $1.37 billion.

Andersons retains a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock.