ADM Acquires Specialty Commodities Inc for $191 Million

By Frazer Jones
Whether its buying or selling, Archer Daniels Midland has not been a stranger to mergers and acquisitions this year. This week marks the completion of a...

Whether it’s buying or selling, Archer Daniels Midland has not been a stranger to mergers and acquisitions this year. This week marks the completion of another deal, with the business acquiring Fargo, ND-based Specialty Commodities Inc. for $191 million.

What can a business like Specialty Commodities Inc. bring to the table for a powerhouse business like Archer Daniels Midland? The answer is simple: the market for healthful foods and organics is growing and—as an importer and distributor of ingredients like nuts, dried fruits, and gluten-free ancient grains like quinoa and amaranth—Specialty Commodities Inc. supplies food processors like General Mills with the commodities they need to nurture that organic and natural market growth.

"We are continuing to expand our specialty ingredients portfolio to better serve our customers, improve returns and reduce the volatility of our earnings," explained Greg Morris, president of ADM's WILD Flavors and Specialty Ingredients business unit, in a press release announcing the acquisition. "Now that Specialty Commodities has joined ADM, we'll be looking at ways to combine SCI's healthy ingredients with ADM's existing products to offer our customers a wider and fuller range of products."

As is often the case when it comes to mergers and acquisitions, this deal means that some executive positions will be shuffled around. Most notable is that Larry Leitner, founding partner and CEO of Specialty Commodities, will be moving into ADM’s also recently acquired WILD Flavors and Specialty Ingredients division to help that area of the business grow. Meanwhile Kevin Andreson, former COO of Specialty Commodities, will take on a new title as Vice President of ADM’s Specialty Commodities division.  

"We've put together a Specialty Commodities leadership team that is ready to grow the business," Morris added in ADM’s release. "They know the importance of this moment: consumers are demanding more of the healthy ingredients that Specialty Commodities can provide, and they're demanding those ingredients in increasingly varied forms and applications. This is the right time for this business, and we are well-positioned to take advantage of the many opportunities ahead."

[SOURCE: ADM via The Wall Street Transcript]

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