TSX: MFI www.mapleleaffoods.com
TORONTO, Aug. 23, 2013 /CNW/ - Maple Leaf Foods (MFI: TSX) today announced that it has entered into a definitive agreement to sell Rothsay, its rendering and biodiesel business, to Darling International Inc. of Irving, Texas. The transaction is expected to close by the end of 2013, subject to regulatory approvals.
"The sale of our rendering and biodiesel business supports our strategy to focus on effective capital deployment and profitable growth in the consumer packaged foods market," said Michael McCain, President and CEO. "We are delighted to have concluded almost a year-long process with an agreement with Darling, the North American leader in food waste recycling. The sale will support future investments in our consumer facing businesses and allow Darling to build on Rothsay's strong capabilities and deep customer relationships."
Rothsay had EBITDA of approximately $85 million in 2012. Proceeds from the transaction of approximately $645 million will initially be used to pay down debt. Upon completion of the prepared meats strategy, management will consider appropriate deployment of excess capital, including reinvesting in its core consumer packaged food businesses or returning excess capital to shareholders.Rothsay is the leading rendering company in Canada and a leading producer of biodiesel. The business operates six rendering plants located in Manitoba, Ontario, Quebec and Nova Scotia and a biodiesel facility in Quebec. It employs approximately 550 people, who will transition to Darling once the transaction closes. Maple Leaf plans to enter into a long term contract with Darling to receive by-products recycling services at competitive market rates. Darling International Inc. is the largest and only publicly traded provider of rendering and bakery residuals recycling solutions to the U.S. food industry. The Company recycles beef, poultry and pork by-product streams into useable ingredients such as tallow, feed-grade fats, meat and bone meal, poultry meal and hides. The Company also recovers and converts used cooking oil and commercial bakery residuals into valuable feed and fuel ingredients. These products are primarily sold to agricultural, pet food, leather, oleo-chemical and biodiesel manufacturers around the world. In addition, the Company provides grease trap collection services and sells used cooking oil collection equipment to restaurants.