Looking to expand its Canadian national presence, diversified meats processorSofina Foods Inc. , Markham, Ont., said it plans to purchaseLilydale Inc., Edmonton, Alb. Officials said they expect the deal -- involving a purchase of Lilydale shares -- will exceed C$130 million and be complete in April.
“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,” said Don Sundgaard, Lilydale’s chairman. “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.”
Officials say Lilydale is a nationally recognized consumer food company with consumer brands in fresh and frozen poultry, deli, sausage and meat snacks including Lilydale, Tailgate, Daystarters, Country Fair, Roast & Boast and ZamZam.
Privately owned Sofina Foods, processes and distributes further processed pork, beef and poultry products for retail and foodservice customers in Canada, the United States and Japan. Sofina’s product portfolio includes the Fletcher’s, Cuddy, Quality Meats and Vienna brands in addition to a private label business.
Officials said the combination of Sofina and Lilydale "will create a strong national champion" in the Canadian meat industry with combined sales revenue exceeding $800 million and a workforce of over 3,300 employees. The businesses are highly complementary with Lilydale’s strengths in Western Canada and primary processing of poultry being combined with Sofina’s strengths in Eastern Canada and further processed products of beef, pork and poultry.
As a result, the combined business will supply retail and foodservice markets across Canada and into the western United States with 12 manufacturing facilities in both primary and further processing operations in British Columbia, Alberta, Saskatchewan, Ontario and Washington State. Pursuant to the transaction, Sofina has committed to invest a further $20 million over the next two years into Lilydale to support operations and facility improvements.
“This is an exciting day for Lilydale as we turn the page of a new chapter in our history,” said Lilydale President and CEO Ed Rodenburg. “This year marks our 70th anniversary and, in partnership with Sofina, we look forward to providing our retail and foodservice customers and consumers with an even stronger and broader portfolio of premium meat products covering all the major proteins, in both primary and further processing. The inherent strengths of the Lilydale and Sofina partnership are clear, and we are confident that our employees, growers, customers and consumers will all benefit.”
Sofina’s President Michael Latifi added, “The Lilydale brand is a natural fit to complement Sofina’s offerings. This partnership works on so many levels, particularly with Lilydale’s geographic coverage in the West and their strong brand presence in the marketplace. Together we are very well positioned to deliver accelerated growth to our retail and foodservice customers throughout Canada.”
Merger links Canada's meat, poultry processors Sofina, Lilydale
February 19, 2010