Back to top

Analyst Blog

Zacks Equity Research

Andersons to Buy Mt. Pulaski Assets

ANDE

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

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.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LAKE SHORE G LSG 0.77 +6.05%
QUESTCOR PHA QCOR 80.07 +2.47%
VIPSHOP HOLD VIPS 156.35 +1.82%
ENLINK MIDST ENLC 36.29 +1.60%
BNC BANCORP BNCN 17.33 +1.58%