Acquisition of Gavilon

Acquisition of Gavilon
May 30, 2012
Agenda
1. Gavilon Overview
2. Gavilon Business Segments
3. Grains
4. Fertilizer
5. Energy
2
Acquisition of Gavilon – May 30, 2012
1. Gavilon Overview
3
•
Headquarters:
11 ConAgra Drive, Omaha, Nebraska, USA
•
Overview:
US-based, leading grains, fertilizer and energy trader with more than 300 storage
facilities and offices worldwide; Gavilon became the third largest grain operation
behind ADM and Cargill following the 2011 DeBruce Companies acquisition
•
Established:
Private investors formed Gavilon and acquired ConAgra Trade Group in June 2008
•
Net Assets:
US$ 1,909 million
•
Sales:
US$ 17,852 million
•
Equity Holders:
Ospraie Fund and Ospraie Special Opportunities Fund, General Atlantic, Soros Fund
Management and Gavilon Management
•
Employees:
1,943
Acquisition of Gavilon – May 30, 2012
2. Gavilon Business Segments
Grains
2011 Sales
Employees
2011 Sales
Employees
US$ 17,852
1,943
Risk Control / Risk Management
Fertilizer
Transportation / Logistics
2011 Sales
Employees
US$ 2,907
311
Energy
2011 Sales
Employees
4
US$ 14,555
1,326
US$ 390
124
•
Grains: Operates a strategic distribution network with more than 140 grain facilities across North
America and the third largest grains storage network in the US with distribution marketing
offices in Australia, Ukraine and Brazil
•
Fertilizer:
Operates one of the largest US wholesale fertilizer networks with 74 storage and
handling facilities across the US, Mexico, South America and Africa with storage capacity of 1.2
million tons and handling volume of 6 million tons
•
Energy: Operates a trading business mainly dealing in crude oil, natural gas and fuels which is
operated through a vast logistics network that includes 8 million barrels of crude oil storage
capacity, 10 billion cubic feet of natural gas storage capacity and 500,000 barrels of
refined products storage capacity
Acquisition of Gavilon – May 30, 2012
3. Grains
Strengths in Grains
•
Third largest storage network (8.3 million tons) and over 140 grain facilities in the US
•
Major US handler of grain ingredients (wheat products, corn products, DDGS, etc.)
•
Operates in key global markets, such as Australia, Ukraine and Brazil
Significance of the Transaction
•
Expansion of the platform in the US, which is the largest grain market in the world
•
Creating a major grains player, with combined handling volume of more than 55 million tons
•
Continued ability to maintain and provide a steady source of grains
Wichita Facility
5
•
852,000 metric tons
storage
•
363 bins stretching
one-half mile
•
shuttle loader
capability
Acquisition of Gavilon – May 30, 2012
3. Grains – Significance of US Market in Global Grains Trade
Grains Demand
Grains Production
(million tons)
(million tons)
US
1,200
2,250
2,000
Top 5 exporters after US (Argentina,
Australia, Brazil, Canada, Russia)
Rest of World
2011
1,000
2011
1,750
1,500
800
1,250
600
1,000
750
400
500
200
250
0
Note: Includes volumes for corn, wheat, soybean
Source: Food and Agricultural Policy Research Institute
6
Acquisition of Gavilon – May 30, 2012
0
US
3. Grains – US Grain Majors (Storage Capacity)
12.0
10.4
9.5
10.0
9.0
8.3
8.1
8.0
6.3
6.0
4.0
2.0
0.0
ADM
Marbeni +
Gavilon
Source: Grain & Milling Annual 2011
7
Acquisition of Gavilon – May 30, 2012
Cargill
Gavilon
Bunge
CHS
3. Grains – Growth Strategy Post-Acquisition
•
Establish a competitive global grain network with Gavilon’s North American operations and
Marubeni’s global distribution channels
Global Grains Trade Supply Chain
Producers
Origination and
Supply
Purchase grain and
ingredients from
farmers, co-ops,
processors and
other merchants
earning origination
margin
Transportation
and Logistics
Merits of scale
when shipping
freight (railroad,
barge, etc.)
Storage
Store and blend
product to meet
customer quality
requirements and
earn elevation,
blending, storage
and carrying charges
Export Sites
Profit from two
export terminals;
Columbia Grain –
100% owned by
Marubeni; Kalama
Export Company –
45% owned by
Gavilon
Marketing and
Distribution
Customers
Distribute to
growing developing
world markets and
Japan; capture
sales margins
Strength in global distribution, especially in China
Strength in origination and supply
8
Acquisition of Gavilon – May 30, 2012
4. Fertilizer
Strengths in Fertilizer
•
One of the largest fertilizer wholesale networks in the US
•
Continuous relationships with more than 1,800 global leading suppliers and customers
•
Leveraging its own market intelligence through grains, ingredients and fertilizer markets
Significance of the Transaction
•
Building up the fertilizer value chain through collaboration with Helena
•
Expansion of the trading and distribution business, and acceleration of fertilizer product manufacturing,
including fertilizer raw materials
Jamestown Facility
9
•
38,100 metric tons of
dry fertilizer storage
•
20,000 short tons of
liquid storage
complete in June
•
Share site with grain
facility
Acquisition of Gavilon – May 30, 2012
4. Fertilizer – Growth Strategy Post-Acquisition
•
Synergy with Helena – significant North American fertilizer market supplier
•
Expansion of fertilizer distribution – international trading / distribution, inter-relationship between grain
and fertilizer demand growth
Gavilon (Fertilizer)
HELENA
Fertilizer Volume
US (4 million tons), Outside US (2 million tons)
US (2.8 million tons)
2011 Sales
US$ 2.9 billion
US$ 3.7 billion
US Fertilizer Market
Supplier
Wholesaler
Retailer
End User
20%(8 mil MT)
Trader owning
import terminals
Import
10 mil MT
Total
40 mil MT
10
15%(6mil MT)
5%(2 mil MT)
Acquisition of Gavilon – May 30, 2012
Large retailer owning
import and domestic
river terminals
Trader / Whole
saler owning import
and domestic river
terminals
60%(24mil MT)
Small – Mid retailer
not owning terminals
Farmer / Co-ops
Domestic
(North
America)
30 mil MT
5. Energy
Strengths in Energy
•
Vast logistics network, that includes 8 million barrels of crude oil storage capacity, 10 billion cubic feet of
natural gas capacity, and 500,000 barrels of refined products storage capacity
•
Sophisticated risk management capability grounded in sound governance structure
Significance of the Energy Business Acquisition and Growth Strategy
•
Expansion of our crude oil, refined products, and natural gas trading , marketing and distribution
business in North America
•
Growth via increased storage assets and further development of stable fee and margin businesses from
existing assets
Cushing Facility
11
•
4.14 million barrels of
storage capacity
•
14,000 barrels per
hour of pipeline
throughput capacity
•
Access to NYMEX
delivery point
Acquisition of Gavilon – May 30, 2012