PE-backed Lansing buys NY commodities business

Investors in the Kansas-based commodity trading and transportation company include Chinese private equity firm New Hope Group and Australian real assets giant Macquarie.

Private equity-backed Lansing Trade Group has purchased the grain and feed ingredient trading businesses of Troy, New York-based Interstate Commodities for an undisclosed sum.

The deal is expected to close in the third quarter, and Interstate chief executive officer Greg Oberting said in a statement that the combined company plans to grow organically and through additional acquisitions.

“Both Lansing and Interstate believe that the industry needs consolidation and want to be out at the forefront of a more efficient and customer-focused business model,” LTG president and chief executive officer Bill Krueger said in the statement.

Interstate’s trading unit works with domestic and international grain and feed producers and consumers in origination, merchandising, logistics and risk management for trade in more than 30 commodities. The company reports $2 billion in annual sales and has 19 sites for storage, receiving and other physical operations spread across nine US states and one Canadian province, according to its website.

Interstate also maintains distinct units devoted to railcar leasing and management and fertilizer and grain storage that were not purchased by Lansing and will continue to operate independently.

LTG was founded in 1922 and trades whole grains, feed ingredients and energy products within North America and internationally. Headquartered in Overland Park, Kansas, the company maintains offices in Brazil, China, Canada, the UK and across the US.

Australian investment bank and diversified asset manager Macquarie holds an equity stake in LTG and the publicly-traded agribusiness The Andersons holds a 33 percent stake in the company.

In December 2015, Chinese private equity firm New Hope Group purchased a 20 percent equity stake in LTG for $127.5 million.

At the time, Krueger said in a statement that the strategic alliance with New Hope would facilitate continued development in China, a market that has presented challenges for LTG.

On The Andersons’ Q4 earnings call in February, chief financial officer John Granato said that 2016 had been a “pretty challenged year” for Lansing, which chief executive officer Patrick Bowe attributed to China’s move to curtail imports of dried distiller grains, an ethanol byproduct used as a feed ingredient of which LTG is among the largest exporters.

“[Lansing is] one of the bigger DDG exporters out of the country targeting China,” Bowe said. “They took some pretty tough shots on that in the middle of the last year, so that hasn’t helped them.”