Era of Russian ownership ends, as Basak closes acquisition of Buhler Industries

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The era of Russian ownership of Buhler Industries — the makers of high-horsepower Versatile tractors and Farm King equipment — is over.

Turkish manufacturer Basak Traktör says it has formally closed its purchase of 96.7 per cent of the shares in Buhler Industries from Rostselmash on Dec. 28 — eight days after the deal was first announced.

Basak’s parent company — ASKO Holding — paid a cash price of C$60.5 million, including $28.2 million for Rostselmash’s shares ($1.16 per share) and $4.1 million in transaction costs, with the remainder attributed to outstanding debt and intellectual property transfers.

Basak is also paying out and making arrangements for undisclosed amounts owed to Canadian Imperial Bank of Commerce under Buhler’s credit facility with the bank. The line of credit, which was secured by inventory and accounts receivable, was worth up to $60 million according to Buhler’s latest quarterly financial report, published Sept. 30, 2023.

Three of Buhler’s previous directors have been re-nominated to the board, including chief operating officer Grant Adolph, Allan Stewart, and Ossama Abouzeid. Basak has appointed Zafer Ozbalaban, Arda Akarsu, Levent Kiroglu, and Ismail Mert Konukoglu as new directors for Buhler, replacing Dmitry Udras, Yury Ryazanov, Adam Reid, and Oleg Gorbunov.

Rostselmash — Russia’s largest agriculture equipment manufacturer — purchased 80 per cent of Buhler Industries from John Buhler for $145 million in 2007, and increased its ownership stake to nearly 97 per cent in late 2021, buying out the rest of the namesake’s stake for $12.3 million ($3 per share). The remaining shares in Buhler are publicly-traded on the Toronto Stock Exchange.

The agricultural manufacturing origins of Basak Traktör, headquartered in Sakarya, Turkey, can be traced back to 1914, operating under the Basak brand since 1996. The company builds tractors with up to 120 horsepower and a variety of other farming equipment. The company’s largest model — the 5120 — won an iF design award in Germany in 2020 (pictured above).

Sami Konukoglu, chair of Basak parent ASKO Holding, said the investment in Buhler is “the next step forward for ASKO Holding’s expansion into the North American market.”

Buhler employs around 800 people at its manufacturing facilities in Winnipeg and Morden, Manitoba. In addition to Versatile and Farm King equipment, Buhler also has an arrangement to build M8 tractors for Kubota.

Buhler’s Russian ownership came under scrutiny with Russia’s invasion of Crimea in 2014 and Ukraine in 2021, with Rostselmash CEO and former Buhler director Konstantin Babkin publicly supporting the Russian government’s actions in both situations. While some of Babkin’s colleagues remained on Buhler’s board, he stepped down as a company director in the days following Russia’s invasion of Ukraine as the company publicly distanced itself from its Russian ownership. The Canadian government did not impose any sanctions on Rostselmash or its owners.

The sale of Buhler coincides with Rostselmash’s plan to open a new tractor manufacturing plant in Rostov-on-Don, Russia in the fourth quarter of 2023.

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