Here’s the release from Two Rivers Water Company via PR Newswire:
Two Rivers Water Company announced today it has entered into an agreement to acquire the operating assets of Dionisio Produce & Farms, LLC, including 150 acres of high yield irrigated farmland and 150 shares in the Bessemer Mutual Ditch Company, a senior water right on the main stem of the Arkansas River. Dionisio Produce & Farms has been producing vegetable crops in Pueblo County, Colorado since the 1930s.
Two Rivers will also lease approximately 170 additional acres of farmland and purchase farm equipment, essentially merging the former operations of Dionisio Produce & Farms into Two Rivers’ farming subsidiary. Russ Dionisio, the third generation owner/operator, will join Two Rivers and continue to manage the farming operations on the acquired and leased land. Two Rivers intends to operate the acquired assets under the Dionisio name, one of the most respected growers under the Bessemer Ditch with well-established produce marketing relationships.
John McKowen, Two Rivers’ CEO, commented, “Acquiring Dionisio Produce & Farms is an important strategic transaction for our company for several reasons. First, Dionisio is a trusted grower of fruits and vegetables for human consumption, which are a higher value agricultural category that compliments the Company’s existing livestock fodder crops. Second, this acquisition brings membership in the Bessemer Ditch, which takes its water by direct diversion from the Arkansas River. Finally, Russ Dionisio’s experience, reputation and proven skill in growing and marketing high value crops add substantially to our farming knowhow.”
The acquisition, which is subject to on-going due diligence, is expected to close by July 31, 2012. Two Rivers has advanced $400,000 into escrow to support Dionisio farming operations during the current growing season. The financial terms of the transaction were not disclosed, but the Company expects to arrange bank financing for a portion of the acquisition.
Russ Dionisio said, “I am proud of the Dionisio farming tradition in the Arkansas River Valley and pleased to join Two Rivers to help carry on our business. By joining Two Rivers, I will be able to concentrate on farming, the part of the business I love, and rely on the Company’s skilled business managers to handle the finance, insurance and compliance aspects of our integrated enterprise. Two Rivers has demonstrated the skill, capacity and perseverance to redevelop both farmland and water infrastructure to support productive agriculture in Huerfano and Pueblo Counties. I am eager to integrate Dionisio into this dynamic organization.”
As noted, the acquisition includes shares in the Bessemer Mutual Ditch Company. The Company’s President, Gary Barber, noted, “The productive integration of fertile land and reliable water under the Bessemer Ditch is a model the Company is trying to emulate as we build out our farm and water assets on the Huerfano and Cucharas Rivers system. When we finish refurbishing our upstream reservoirs and integrate a drought-proof groundwater component to our system, we expect to replicate the level of water reliability of the Bessemer Ditch that has sustained the Dionisios for more than 60 years, through all hydrological and weather cycles. By integrating the Dionisio business into our own, Two Rivers will gain not only a new source of farm revenue but also experience in growing and marketing the higher value crops that are the long-term future of our Company. This acquisition supports both our existing and our planned water rights and infrastructure, allowing us to manage our resources in conjunction with the Bessemer system.”
More coverage from Chris Woodka writing for The Pueblo Chieftain. From the article:
A water development company that plans to restore agricultural ground in Pueblo and Huerfano counties is purchasing a farm on the Bessemer Ditch…
The acquisition will be added to the 4,700 acres Two Rivers already owns in southeastern Pueblo County and Huerfano County. The company has purchased nearly all of the Huerfano-Cucharas ditch, Cucharas Reservoir and the Orlando Reservoir system. The Bessemer Ditch water rights will allow the company to add fruits and vegetable crops to the forage crops it is growing on the other acreage, McKowen said. It also gives the company a direct water right on the Arkansas River, part of the long-term strategy for finding water to fill Cucharas Reservoir…
The purchase of Bessemer shares is the latest in transfers that are changing the nature of the Bessemer Ditch. For years, the ditch was a collection of relatively small farming operations. Pueblo County’s largest ditch flows through Pueblo and irrigates about 20,000 acres, mostly east of Pueblo. It receives its water directly from Pueblo Dam. The Pueblo water board has purchased about 28 percent of water rights on the ditch since 2009 for $10,150 a share, and continues to make purchases. All of its contracts include allowing the farmers to use the water for irrigation for 20 years. The St. Charles Mesa Water District has purchased about 10 percent of the Bessemer Ditch over the years for domestic water service on the St. Charles Mesa.