AgJunction Inc. announced that it has concluded an internal review to identify operating synergies following the completion of its merger with Novariant, Inc. on October 16, 2015. As a result of such review, the company is implementing a program that will consolidate operations and redundant resources reducing its global workforce by approximately 20% by the end of Q3-2016.
The program will take place over the first nine months of 2016, with the bulk of the costs being recorded in the fourth quarter of 2015. The cash cost of the program is estimated at $0.6 million. This program is intended to streamline the Company's overall business and, upon completion, synergies from the program are estimated to lower total expenses by approximately $3.3 million per annum through reduced operating overhead, manufacturing costs, and improved operating margins. During the streamlining of the organizational structure the core business and customers of the Company will not be interrupted.
"As part of the Company's initiative for sustainable profitability, we have undertaken this near-term program to leverage the immediate business synergies available which reduces costs and improves operating efficiencies," said Dave Vaughn, AgJunction's Chief Executive Officer. "We are also aligning our workforce to our current needs to focus on the core business. We are reviewing longer-term synergies under which we can rationalize products, engineering projects and geographic markets."