Global ag merchant Viserion purchases Western Milling headquarters, plant in Goshen after a decade of legal troubles for one of the nation’s largest and oldest animal feed makers
GOSHEN – One of the oldest and largest animal feed manufacturers in the country was sold two weeks ago following nearly a decade of legal troubles.
Goshen-based Western Milling, LLC was acquired by Viserion Milling, LLC on June 13. With a legacy dating back to 1935, Western Milling is one of the oldest and largest industrial providers of mixed grain cattle feed products to the dairy industry in California, which accounts for approximately 20% of all U.S. dairy output.
Western Milling also operates large-scale fertilizer transportation and grain merchandising businesses with a fleet of natural gas-powered trucks. Beyond mixed cattle feed, Western Milling provides a full suite of customizable animal nutrition products including complete feeds, blended vitamin-rich feeds, pelleted feeds for both poultry and branded pet foods, rolled grains, supplements, and other grain commodities including millrun, molasses, rice bran and whey.
Viserion International is a global agricultural merchant based in Boulder, Colo.
“Western Milling has been a well-respected cornerstone of California’s agriculture industry for nearly a century,” said Viserion International CEO Aaron Wiegand. “We are thrilled to acquire this outstanding, multifaceted company whose feed mill and fertilizer operations will complement Viserion International’s existing grain-handling and commodity trading offerings. We look forward to working with Western Milling’s seasoned management team and excellent operational personnel, who will strengthen our international agribusiness platform.”
The primary facilities being acquired by Viserion are located in Visalia (headquarters), Hanford and Famoso, Calif.; Hereford, Texas; and Buckeye, Ariz. Viserion International is a global agricultural merchant based in Boulder, Colo.
Outgoing CEO Kevin Kruse, the grandson of Western Milling’s founder Otto Kruse, said the sale did not include the parent company’s Kruse Western, Inc.’s Perfection Pet Food division which operates a large plant at 30366 N. Camp Dr. in Visalia. Otherwise, operations will stay the same with employees retaining their jobs. Kruse added that current Valley expansions underway will move forward including doubling the track at the Hanford yard enabling dual unit-trains each with 100 cars to be serviced. Also the Famoso mill will expand its manufacturing capacity. Kruse will serve as Executive Chairman of Western Milling. Chad Pinter, currently Chief Financial Officer of Western Milling, will succeed Kevin as Chief Executive Officer.
Terms of the deal were not disclosed but come three and a half years after Western Milling’s parent company, O.H. Kruse Grain & Milling (or Kruse-Western, Inc.), agreed to pay $2.4 million to settle a lawsuit over contaminated animal feed that killed or severely injured 50 horses in the Central Valley in 2015. The horse feed was produced at its Goshen plant in September 2015 and was contaminated with Monensin, a livestock drug that when fed to horses is known to be fatal. Known as an ionophore, the drug-laced feed resulted in a number of deaths. In 2016 the Goshen facility improperly mixed the same livestock drug into medicated cattle feed, which contributed to the deaths of several dairy calves.
The lawsuit was brought by Black Fence Farms, which is owned by Katie Flanigan, along with 37 other plaintiffs, who sued Western Milling on June 10, 2016 for their manufacturing and distribution of poisonous feed that the plaintiffs purchased and fed to their horses. The horse feed killed 21 horses and severely sickened 28 others, from which the horses will never recover. The settlement was announced on the first day of the trial on Oct. 26, 2018.
In 2016, the California Department of Food and Agriculture instituted proceedings to revoke Western Milling’s commercial feed license for repeated and multiple violations of the Food & Agriculture Code. In February 2017, Western Milling agreed to pay a fine of $526,500 to CDFA and was required by the agency to implement $200,000 of new equipment in the Goshen facility to ensure that feed safety measures over and above industry standards will be met. Western Milling also agreed to cease all manufacturing of horse feed at its Goshen facility no later than April 15, 2017. The company opened a new horse feed mill across the railroad tracks from the Goshen facility in December 2017.
Western Milling’s parent company is currently embroiled in another lawsuit, this time with its own employees. In February 2019, workers who participated in a deal to buy all of the company’s stock filed a class action lawsuit after the stock price plummeted, causing a multi-million loss for the employees’ investment, according to its law firm Cohen Milstein Sellers & Toll PLLC. The stock was sold to employees for an inflated $244 million. Shortly after that sale, the value of that Kruse-Western stock dropped to just $26.6 million. The lawsuit alleges the stock sale failed to account for liabilities in connection with the recurring contamination of animal feed produced by Western Milling at its Goshen plant. Western Milling’s motion for a summary judgment was denied by the federal judge on Dec. 13, 2021. No trial date has been set in the case.
Viserion International and its subsidiaries are backed by Pinnacle Asset Management, L.P., a New York-based alternative asset management firm focused on global commodities markets.
“Viserion International’s domestic growth plans will be significantly amplified by Viserion Milling’s comprehensive portfolio of agribusiness units and established presence in the California dairy market,” said Jason M. Kellman, managing partner and chief investment officer of Pinnacle. “Following Viserion International’s recent portfolio acquisition of ten grain elevator facilities from Zen-Noh Grain Corporation, we are pleased that the company continues to grow into one of the leading agricultural merchants in the U.S.”
Viserion acquired 11 grain facilities from Zen-Noh Grain Corporation (ZGC) in April 2021. ZGC trades and exports corn, soybeans, sorghum, wheat and byproducts from its state-of-the-art export elevator located on the Mississippi River in Convent, La. to Japan and other global markets. ZGC also has grain origination interests in Canada and Brazil, and a forage processing business in Pasco, WA.
Rabobank acted as the exclusive financial advisor to Kruse Western, Inc. on the transaction.
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