Dive Brief:

• Ag Growth International CFO Jim Rudyk will resign from his role effective May 8, the company announced in a Monday press release and filing with the Toronto Stock Exchange.  
• His departure comes just days after the global food infrastructure company announced a sweeping restructuring of its executive leadership team following a board refresh and CEO change earlier this year, according to its fourth-quarter earnings results published March 24.
• Among other changes, the company will reduce its executive leadership team from 17 to 8 members, consolidate “select” corporate and leadership roles to operate from its Winnipeg, Manitoba headquarters, and update its “corporate compensation structures to better align with shareholder returns,” according to the earnings report for the quarter ended Dec. 31.

Dive Insight:

Rudyk will leave AGI — which manufactures machinery and solutions for food processing, transport and storage — after nearly six years as CFO beginning in September 2020, according to his LinkedIn profile. He will stay on to ensure a smooth transition, AGI said in the Monday release. The company will “immediately commence a search for a replacement CFO” to be based in its Canadian headquarters in Winnipeg, according to the release.  

AGI did not immediately respond to questions regarding if it appointed an interim CFO as it begins its search for Rudyk’s successor.

The finance chief’s departure comes approximately two months after AGI’s then-CEO and President Paul Householder stepped down for “personal reasons,” with the business appointing its SVP of North America Farm and Global Portables Paul Brisebois to both seats on an interim basis, according to a Jan. 15 press release. Householder’s departure was itself followed by a board refresh in February, with AGI appointing two new directors and announcing three previous directors will be stepping down.

Revitalizing its executive leadership team is an essential part of the company’s restructuring plan, which was determined after the board and CEO transitions prompted a “comprehensive and critical review of AGI’s business practices, organizational and cost structures, and investment approach” by its board of directors, according to AGI’s Q4 earnings report.  

As well as reducing the size of its team and reworking its executive compensation structure, AGI will also reorganize its North American leadership into a “single unified regional business,” it said. Other initiatives included in the plan include a move to suspend its quarterly dividend, terminate an ERP deployment plan, and reevaluate its asset portfolio with an eye toward strengthening its balance sheet.

AGI will also reevaluate how it approaches “major international Commercial projects,” noting that while opportunities in emerging markets such as Brazil represent significant growth opportunities, the business will examine future opportunities in such markets “with a view to substantially improving the free cash flow profile of such projects,” the company said.

“While this may negatively impact the Commercial order book in the near term, it will improve the quality of future commercial projects from a return on invested capital and balance sheet perspective,” AGI said. 

The company expects to see non-recurring expenses of up to $20 million in the first half of the year associated with its plan, while, once completed, it expects annual cost savings of “at least” that amount, according to the report.

“Our restructuring program is designed to drive margin recovery, better cash conversion and a stronger balance sheet over time,” Rudyk said in a statement included in the release.

The plan has faced criticism from some shareholders, however. Shortly after AGI reported its Q4 results and announced the restructuring, shareholder Plantro Ltd — an activist investor and privately held investment firm — called on AGI’s board to begin a formal sales process to solicit bids for acquisition of the entire company, according to a March 26 press release. 

“The Company’s current turnaround plan appears to be focused on cost-cutting efforts and piecemeal asset sales to raise cash, and the recruitment of a permanent CEO,” the activist investor said in the release. “Plantro believes that these cash-saving measures may potentially impair the future growth prospects of the business and are unlikely to be materially accretive to shareholders.”