PONOKA, Alta. – A group of producers is trying to raise $150 million to buy one of Canada’s largest meat processing plants and establish a chain of meat superstores across Canada.
Canada Farm Direct must raise $30 million to buy the plant and then raise another $120 million through a public share offering to expand it and build retail stores.
Company founders Dale Mather and Dennis Duncan of Bentley, Alta., said a confidentiality agreement prohibits them from announcing the name of the plant until the money is raised and the deal finalized. They did say it involves Canada’s fourth largest slaughter and processing company.
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“I’m the producer that has to be so careful I don’t spit something out,” said Duncan, who is travelling the Prairies trying to raise producer and corporate money.
“I’m so excited about how big this thing is and what it can do for the producers in this country to buy the existing plant.”
Duncan said they have already raised several million dollars, but have a “long way to go” before they reach the $30 million goal.
Mather said the purchase would put control of the meat packing industry back in the hands of producers.
Under the share structure, a $10,000 dividend-producing share guarantees a 50-head a year slaughter space for life. A $100,000 dividend-producing share guarantees the slaughter of 750 animals per year for life.
If the initial purchase is made, Canada Farm Direct would offer a public share offering to raise the rest of the money to expand existing facilities, build new ones and build a network of retail meat stores.
The goal is also to increase slaughter capacity significantly.
Mather said once the company has gone public, producers will own between $30 and $60 million worth of common shares.
“It’s going to be a producer-controlled public company,” said Mather, who added it’s a good opportunity to buy an existing and profitable slaughter facility.
“This is a very profitable organization, both historically and of recent. The markets are such that the value of these companies is at the high end of their value. This is a good time to sell.”
He expects to raise the money and make an announcement of a purchase by the end of September.
Brian Read of Levinoff Meats in Kit-chener said he had not heard about the sale.
“I’m not aware of it. If you hear of anything let me know.”
The $30 million plant price is a reasonable price for a plant of his company’s size, he said, adding it costs about $325 per sq. ft. to build a slaughter plant similar to Levinoffs.
Better Beef in Guelph, Ont., and XL Foods in Calgary did not return calls.
