Toronto-area meat processor Sofina Foods has signed a $75-million cash-and-bonds deal to take over Edmonton poultry packer Lilydale Inc.
Privately held Sofina, which processes and sells pork, beef and poultry products for the domestic, U. S. and Japanese markets, has offered Lilydale’s shareholders $10 cash and about $5.43 in debentures per share.
The buyer will also take on Lilydale’s outstanding debt, bringing the total value of the deal to over $130 million, the two companies said Feb. 18.
The deal also commits Sofina to invest another $20 million over the next two years into Lilydale, to support its operations and “facility improvements.”
Shareholders of Lilydale, which demutualized out of a farmer co-op into an investor-owned corporate structure in 2005, are to vote on the Sofina deal at a meeting “on or around” April 6.
Pending regulatory approval, the two companies said they expect to close the deal in April.
Lilydale’s poultry slaughter and processing facilities include plants at Edmonton (turkeys, broilers, fowl), Calgary (chicken), Abbotsford (turkeys), Port Coquitlam, B. C. (chicken), and Wynyard, Sask. (broilers). It had also owned a poultry plant northwest of Montreal since 2004 but sold it in January last year.
Lilydale also runs hatcheries at Edmonton, Wynyard and Abbotsford.
The company’s poultry, deli, sausage and meat snack brands include Lilydale, Tailgate, Daystarters, Country Fair, Roast + Boast and ZamZam. In all, the meat and hatchery operations employ about 2,100 people across the West.
The firm formed in 1940 as Alberta Poultry Producers Ltd., bought its first plant in Edmonton in 1941 and became Lilydale Co-operative Ltd. in 1976.
Sofina and Lilydale said the combined company would have sales over $800 million and a workforce of over 3,300.
Sofina, based at Markham, near Toronto, runs plants at Vancouver, Brampton, London and Dublin, Ont., plus a Fletcher’s Fine Foods plant at Auburn, Wash., northeast of Tacoma, and a Vienna plant at Scarborough, Ont.
“Over the past several years, Lilydale has been approached by a number of different companies regarding potential transactions,” said Lilydale board chairman Don Sundgard, a chicken farmer from Standard, Alta.
Lilydale, however, “did not feel that any of those potential suitors were the right fit until now,” he said.