U.S. firm to buy Maple Leaf's Burlington pork plant

Wednesday Nov 10 2010
by www.manitobacooperator.ca

Up for sale since 2008, Maple Leaf Foods' Burlington, Ont. pork slaughter and packing plant will be picked up by a U.S. private investment firm for about $20 million.

The Toronto food firm on Tuesday announced a deal with an unnamed affiliate of Sun Capital Partners, a major U.S. private investment firm headquartered at Boca Raton, Fla. and best known in the world of leveraged buyouts.

"We are very pleased to have secured a buyer who will continue to operate the facility, providing ongoing employment to a highly skilled workforce, and an important market for Ontario's hog producers," Maple Leaf chief financial officer Michael Vels said in a release.

The deal is expected to be sealed within the next few days, Maple Leaf said.

Maple Leaf's own prepared meat operations will continue to be an "important customer" for the Burlington plant, which will also have a long-term contract with Maple Leaf's rendering operations as part of the sale agreement.

Canada's pork industry has seen a sale coming for the Burlington plant since 2006, when Maple Leaf launched a major reorganization of its meat processing ("protein") operations.

Maple Leaf's goal in that process was to meet all its prepared meat businesses' requirements for fresh pork through one slaughter and processing plant at Brandon, Man., supported by that plant's expansion to a double shift.

The company launched the formal process in mid-2008 to put the Burlington plant up for sale, but put the sale process on hold in April 2009, citing economic conditions and "no immediate urgency" to sell the facility.

The plant was put back up for sale in May this year, with Maple Leaf citing "renewed interest" and mentioning the possibility of a sale to an unnamed producer group.

"Most efficient"

With this sale complete, Maple Leaf said Tuesday it will have reduced its annual pork processing from its 2006 level of over seven million hogs, down to about 4.3 million hogs, concentrated at Brandon.

Maple Leaf in May described the 365,000-square foot plant at Burlington, northeast of Hamilton, as "one of the largest and most efficient pork processing facilities in Canada. Together with its management and sales teams it is a profitable business with a highly skilled workforce."

A Sun Capital spokesperson wasn't immediately available Tuesday to discuss the company's plans or to name its affiliate that will operate the plant.

However, the company is no stranger to the food business, with about 11 per cent of its total holdings in restaurants, four per cent in the food and beverage sector and another nine per cent in retail grocery and convenience stores.

Among its food affiliates are CanGro Foods, the Toronto-based marketer of Del Monte and Aylmer canned fruits, vegetables and soups; U.S. food/gift retailer Hickory Farms; California berry producer Sunrise Growers; and Kansas-based Creekstone Farms Premium Beef.

Sun Capital's restaurant chain holdings include Boston Market, Bruegger's, Smokey Bones, Souper Salad/Grandy's, Fazoli's, Friendly's, Garden Fresh, Captain D's Seafood Kitchen, Bar Louie and U.K. nightclub chain Atmosphere. Its stakes in U.S. food retailers include Pamida, Marsh Supermarkets and Village Pantry.



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