Sofina Foods of Ontario is buying Lilydale Inc., one of Western Canada’s largest and oldest poultry processing companies, for $130 million.
If shareholders approve the sale at their April 6 meeting, Lilydale will become a wholly owned subsidiary of Sofina Foods.
Under the proposed agreement, Lilydale shareholders would exchange their shares for $10 per share in cash and $5.43 per share in debentures. Sofina will also assume about $55 million in Lilydale debt.
Lilydale was created in 1940 by a group of Alberta poultry producers as a co-operative, but moved to a share structure in 2005, said Ed Rodenburg, chief executive officer of Lilydale.
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“We have been looking to create liquidity for the 1,100 shareholders,” said Rodenburg.
“We think this is a good thing for the organization and the growth forward will translate into growth for producers,” he said. “It’s a strong industry.”
Sofina manufactures and distributes processed pork, beef and poultry products for retail and food service in Canada, the U.S. and Japan.
Lilydale, headquarted in Edmonton, processes fresh chicken and turkey, deli and prepared chicken and turkey products that are distributed across Canada at major retailers.
The company employs about 2,100 people at facilities in Abbotsford and Port Coquitlam, B.C., Edmonton and Calgary and Wynyard, Sask.
Sofina plans to invest $20 million over the next two years to support improvements in Lilydale.
