Buhler Industries acquired by Turkish company

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This article was published 21/12/2023 (715 days ago), so information in it may no longer be current.

Buhler Industries, the Winnipeg-based company that is the last surviving tractor manufacturer in Canada, has been acquired by a Turkish agricultural equipment company.

Basak Tractors, a division of ASKO Holdings, will pay a total of $60.5 million for 97 per cent of the shares of Buhler Industries that had been held by Combine Factory Rostselmash Ltd., a Russian company that acquired controlling interest in Buhler in 2007.

The deal, which includes covering debts that Buhler owes Rostselmash is to close by the end of the year or early 2024.

Officials from Buhler Industries as well as industry observers believe it’s a deal that will benefit the on-going future of the enterprise that has been fairly hard hit by the disruptions from post-pandemic supply chain issues.

Buhler employs more than 800 people in plants in Winnipeg, where it makes the Versatile-brand tractors and tillage equipment and in Morden where it makes the Farm King brand grain and hay handling equipment and compacting equipment.

Basak makes tractors up to 120 horse power (compared to Versatile’s much larger 170-to-620  horsepower machines). About 80 per cent of its sales are in Turkey, but it also exports as far afield as Africa, South America and Japan.

Back in the summer, Buhler Industries announced that it had hired a capital markets company to help it find investment partners.

Adam Reid, vice-president of sales and marketing for the Versatile brand, said, “From the very beginning we made it clear whatever investment partner we selected would be committed to preserving the legacy of both Versatile and Farm King brands. We feel we found that and we’re very excited to be able to maintain that trajectory.”

Buhler officials were not able to definitely say that management and staff will remain in place, but industry officials believe that the deal bodes well for the future of the company.

John Schmeiser, the chief operating officer of Kansas City-based North American Equipment Dealers Association and president of its Canadian division, said he believes it is a good strategic move for the Turkish company’s entrance into the North American market.

“On the surface it looks like it will be a very stabilizing effect on Versatile,” he said. “This will be well received by our equipment dealers, no question. It brings stability to an iconic brand. This is what our dealers want.”

Buhler’s revenue slumped badly in 2022 to $240 million, about 25 per cent less than 2021 and about 33 per cent below its revenue from 10 years ago.

The fact that Buhler Industries was majority owned by a Russian firm did not help the company’s fortunes after Russia invaded Ukraine in February 2022.

Schmeiser said the company was unfairly tarnished by its Russian connection, but it also struggled to deliver orders on time as it scrambled to secure components with a global logistics system out of kilter.

Reid said the company actively condemned the Russian invasion of Ukraine and he said, “We have made it very clear that we operated autonomously from Rostselmash, we didn’t send profits overseas and we had the autonomy to make our own decisions.”

He said the new owners will be able to provide value-added support to Versatile and Farm King’s business especially since they already share some common suppliers.

“We hope to be able to expand that using Buhler Industries’ and Basak’s global reach to firm up our component supply chain as we move forward.” Reid said.

The Buhler deal was announced the same day as Guelph-based Linamar Corp.’s $640 million acquisition of Bourgault Industries Ltd. of St. Brieux, Saskatchewan.

Donna Boyd, president of Winnipeg-based Agricultural Manufacturers of Canada, said both deals bode well for the Canadian industry.

“These deals are going to help Canadian companies to stay strong and innovate,” she said.

While she admitted that Basak was not a brand name she was aware of, she said the fact that ASKO is looking to use Buhler as an entrée into the North American market will help the overall climate.

And despite Buhler’s poor 2022 results, Boyd said the industry has never been stronger.

“We have had an incredible number of years even during the pandemic,” she said.

Exports from her association’s members increased by $1 billion to $3.74 billion in 2022 compared to 2021.

“Anything producers can do to help them increase their yield and reduce costs they will definitely want to invest in,” she said.

martin.cash@freepress.mb.ca