Sofina Foods Buys Lilydale
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Image: Michelle Meiklejohn
Producer-controlled poultry processing plant, Lilydale Inc., has been sold to privately-owned firm, Sofina Foods, based in Markham, Ontario, for about $130 million. Sofina will pay nearly $75 million in cash and debentures, and will assume Lilydale’s $55 million debt. The company has also promised that it will spend $20 million over the next two years in order to upgrade the facility’s production capacity.
Lilydale shareholders will be eligible to receive $10 a share, cash, as well as $5.43 a share in 4 per cent debentures, maturing October, 2011. In a statement, Lilydale’s Chairman of the Board, Don Sundgaard, explained that Sofina was the right buyer for the organization.
“Over the past several years, Lilydale has been approached by a number of different companies regarding potential transactions; however, the Company did not feel that any of those potential suitors were the right fit until now.
“In deciding to recommend this transaction for approval by the Lilydale shareholders, the Board of Directors considered a wide range of factors and received detailed advice and various opinions from the Company’s external legal and financial advisors. In our view, the consideration to be paid and the terms of the arrangement are fair and appropriate and should be seen as very attractive to all Lilydale stakeholders, from its shareholders through to its customers.”
Lilydale shareholders will be able to vote on the deal in early April. Assuming shareholder agreement, the transaction should close by the end of April.
Sofina Foods currently employs about 1,200 people at six different facilities. The company produces beef, poultry and pork under private labels, as well as their own brands, Cuddy, Quality Meats, Fletchers and Vienna.
Lilydale represents a significant acquisition as the company has 2,100 employees across the country, in plants in Edmonton, Calgary, Abbotsford, Port Coquitlam, and Wynyard, Saskatchewan. Lilydale is a leading producer of poultry as well as deli meats and sausage.
After the acquisition, Sofina and Lilydale will have a combined sales revenue of over $800 million, with a workforce of about 3,300 people. Lilydale is strong in western Canada and a primary processor of poultry, while Sofina is strong in Canada and a leading processor of beef and pork.
