Energy, grains and food company CHS Inc. has signed a purchase agreement to acquire the liquid lubricants business of Nor-Lakes Services Midwest Inc. of Hugo, Minn. and The Farm-Oyl Co. of St. Paul, Minn. Terms were not disclosed for the joint acquisition, which is expected to close on April 30.
Nor-Lakes Services Midwest is a private-label lubricant and grease manufacturer, founded in 1988. Products it manufactures include the Farm-Oyl brand. Farm Oyl has manufactured and marketed lubricants for agricultural customers in the upper Midwest since 1929.
CHS produces Cenex-branded and other lubricants at three manufacturing facilities in Minnesota, Ohio and Texas. The company markets a full line of lubricants for use in agricultural, commercial, recreational and industrial equipment.
Nor-Lakes NL Grease LLC will continue to produce and distribute grease products from the companys Kansas City manufacturing facility.
Farm-Oyl Executive Vice President and Chief Operating Officer Bruce Larson told Lube Report there were appealing synergies with CHS. CHS is a well established company, well known — weve competed with them, he said. Theyre in the same market, and they have some of the same values we have.
Larson said the Farm-Oyl brand will continue. Weve got some members of the Farm-Oyl team moving with the brand, he said. The blending and packaging team will be moving to the CHS facilities here in Inver Grove Heights.
Anwer Hussain, senior vice president of lubricants for CHS, told Lube Report that CHS plans to hire key employees of the two companies. They will be transitioned into CHS, starting May 1, Hussain said. In a situation like this, we have to offer employment, and then they would have to accept it, so we dont know what the numbers will be at this point.
He said acquiring Nor-Lakes lubricants business will help CHS optimize use of one of its existing plants. We have a plant that is not fully utilized, so this will allow us the optimization of our plant that is in Inver Grove Heights in the Twin Cities area, Hussain said.
The acquisition of Farm-Oyl fits in with CHSs brand growth strategy, according to Hussain. Farm-Oyl, which is in the ag business, provides us with a brand thats been around for over 75 years, he said.
CHS will continue to do private label business for other customers who want to work with the company, Hussain said, adding that it does private label business from its three locations, which include Amarillo, Texas and Canton, Ohio as well as in Minnesota.
James Taglia, Nor-Lakes president, said all liquid lubricant production would be transferred from the Hugo, Minn. location to CHS facilities effective May 1. CHS has a strong commitment to being a long-term, dependable supplier and is equally committed to continuing to serve our customers, Taglia said.