The Enid News and Eagle, Enid, OK

Local news

February 3, 2014

Meibergen: W.B. Johnston Grain's decision 'very strategic, very thought-out'

ENID, Okla. — The announcement of W.B. Johnston Grain selling to Louisiana-based CGB Enterprises could open doors for local producers serviced by the 120-year-old Enid company.

Johnston entered into a letter of intent to sell its grain company and related business to CGB Enterprises, a grain and transport business based in Covington, La.

The transaction is expected to close within 35 to 40 days, according to a press release from the companies announcing the sale.

Also announced Monday was the sale of Johnston’s Port 33 to Arkansas-based Bruce Oakley Inc.

Johnston President Joey Meibergen said the company has been working on the deal “in excess of a year.” He called the decision  to sell as a “very strategic and very thought-out” process.

“Our industry has changed so rapidly since 2008 when commodities prices spiked,” he said. “The amount of risk involved in operating a company like ours has increased substantially.”

Meibergen said the number of companies consolidating also has increased over the last few years.

“With the increased amount of burdensome regulation, if you’re going to maintain your competitiveness and ensure employees are going to have opportunities to grow, you have to think outside the box and diversify,” he said. “The employees of Johnston have done a fabulous job diversifying in Oklahoma.”

Meibergen said the company would have had to raise capital to attempt to extend the business into the realm of a company such as CGB Enterprises.

“We are either going to have to raise a large amount of capital to do it ourselves or take the time to choose the right partner to align with (what) gives us that immediately,” Meibergen said. “We chose to align ourselves for the benefit of the family, for the benefit of the employees and for the benefit of the customers we serve.”

He said Johnston wanted a company with similar values to its own.

“This was very strategic, well thought out and planned to compete in tomorrow’s agri-business sector,” Meibergen said.

He said he company also would be able to office services to customs they would not have been able to on their own.

“We’ll make this as seamless a transition as possible and make this as easy on our customers as possible,” he said.

Enid Regional Development Alliance Executive Director Brent Kisling said the sales were an opportunity for the Meibergens.

“I think this is a great opportunity for the Meibergen family and for the employees of W.B. Johnston,” Kisling said. “W.B. Johnston Grain is a large, very well-connected grain handling company, and it will allow our producers to have access to those supply chains, better than what they’ve had before.”

He said the change of ownership will benefit Oklahoma wheat producers.

“We’re also pleased that the same leadership is going to be staying in place in Enid and employees are going to be taken care of,” Kisling said. “It’s going to allow for long-term stability of the company.”

Oklahoma Wheat Growers Association Executive Director Tim Bartram said announcement of the sale was “interesting news.”

“I can’t say it was a complete shock,” he said.

Bartram noted larger multi-million dollar companies are becoming more involved at local grain elevators than they have historically.

“There will be some change,” Bartram said. “To what extent? It may take a while to find out.”

“If you look back at the history of W. B. Johnston Grain, you see they have been instrumental for wheat producers in Oklahoma,” Oklahoma Wheat Commission Executive Director Mike Schulte said. “No doubt, the Johnston family has been very great for Oklahoma.”

He said taking into account the future of the wheat industry and seeing how grain movement is being handled with larger multi-national firms, he could see why the Meibergens were taking the opportunity to sell.

“The Oklahoma Wheat Commission has worked with Consolidated Grain and Barge in the past,” Schulte said. “In past work with them, we felt like this will be a positive outcome for wheat quality needs of foreign buyers, as well as help with transportation logistics for the Oklahoma wheat industry.”

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