by Laura Board | Published May 29, 2012 at 10:12 AM
Japan's Marubeni Corp. Tuesday, May 29, won the auction for agricultural commodities trading company Gavilon Group LLC with an offer worth about $5.6 billion including debt.
The deal provides an exit for Gavilon's financial investors, which in January enlisted Morgan Stanley to review the Omaha company's options. For Marubeni, a diversified trading company, the purchase will double the size of its grains handling business and give it better access to export supplies from the huge North American grains market.
Gavilon is owned by asset management firm Ospraie Management LP's private equity fund, Ospraie Special Opportunities; General Atlantic LLC; and Soros Fund Management LLC. The private equity investor group in March 2008 acquired ConAgra Foods Inc.'s commodity trading division, ConAgra Trade Group, for $2.8 billion, and later rebranded the unit as Gavilon LLC.
Other suitors for Omaha-based Gavilon are reported to have included Glencore International plc, Bunge Ltd., and Noble Group Ltd.
Marubeni is paying $3.6 billion cash and assuming about $2 billion in debt for Gavilon, its largest overseas acquisition to date.
Marubeni has been an active acquirer of overseas assets in recent months. In March it formed part of a consortium including South Korean steelmaker Posco and South Korean shipbuilder STX Corp. which struck a A$3.5 billion ($3.63 billion) deal to secure a 30% stake in Australia's Roy Hill iron ore project. Earlier that month Marubeni teamed up with government-backed Innovation Network Corp. of Japan to buy wind-farm-services company Seajacks International Ltd. from New York buyout shop Riverstone Holdings LLC for an estimated $850 million.
Gavilon's business includes agricultural commodities and fertilizers as well as energy services, where its range of services covers storage, transportation, risk management and hedging.
In a statement Gavilon President and CEO Greg Heckman said of the takeover: "As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand. "
Jones Day was Gavilon's legal adviser.
Marubeni shares closed up 2.6% at ¥517 in Tokyo Tuesday, giving it a market value of ¥898.5 trillion ($11.3 billion).
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