Maple Leaf Foods is selling off its meat rendering and biodiesel business to pay down debt and invest in its prepared meat business.
The company announced today that it has sold Rothsay to Darling International, a rendering and food recycling company in Texas, for $645 million.
“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 Maple Leaf president and chief executive officer Michael McCain, in a release.
“We are delighted to have concluded almost a year-long process with an agreement with Darling, the North American leader in food waste recycling.”
Read Also
Alberta Crop Report: Rains in the south, dryness in the north
Rain fell onto the southern half of Alberta last week, while hot and dry conditions persisted in the northern half, according to the province’s crop report released on July 18.
Maple Leaf said the leftover cash from the sale, after paying down debt, will be invested in its “consumer packaged food businesses” or returned to its shareholders.
Dave Bauer, Maple Leaf spokesperson, said the capital would help the company remain “acutely focused” on its prepared meat business.
“We’re investing over $500 million in developing a world class prepared meats network that consists of plants and distribution centres,” he said.
“We are doing that to build scale to combat competitive pressures and make sure that we are laser-like focused on innovation.”
Rothsay, a recycler of animal and food products, employs 550 Canadians at six rendering plants in Manitoba, Ontario, Quebec and Nova Scotia. It also has a biodiesel plant in Quebec.
It produces protein and fat for the aquaculture industry, edible fats for baking, pet food ingredients and protein for the livestock industry.
On the company website, Darling International is described as America’s leading provider of rendering and recycling for the U.S. food industry. It operates dozens of rendering plants across the United States.
The company, which trades on NASDAQ, had revenues of $1.7 billion in 2012.
According to Reuters, Maple Leaf shares rose 9.9 percent in Toronto following the sale announcement.
Darling’s stock gained 14.5 percent in morning trading.
