EDMONTON — One of Canada’s leading poultry manufacturers is set to be gobbled up by another of the nation’s leading meat manufacturers.
Sofina Foods Inc. of Markham, Ont., and Edmonton-based Lilydale Inc. announced yesterday that they have signed an agreement under which Lilydale will become a wholly owned subsidiary of Sofina Foods.
Lilydale is a nationally recognized consumer food company with leading consumer brands in fresh and frozen poultry, deli, sausage and meat snacks. Privately owned Sofina Foods, manufactures and distributes further processed pork, beef and poultry products for retail and foodservice customers in Canada, the U.S. and Japan.
The proposed deal is set to be completed by way of a court-approved plan of arrangement where Lilydale’s shareholders will exchange their shares for $10 per share in cash and approximately $5.43 per share in debentures for aggregate consideration of $75 million. Including the existing debt of Lilydale — which will remain outstanding at close — the total enterprise value of Lilydale will exceed $130 million.
Lilydale’s shareholders will be asked to vote on the arrangement at a shareholder meeting to be held around April 6 and, subject to Lilydale shareholder approval and applicable regulatory approvals, the transaction is expected to close later that month.
“In deciding to recommend this transaction for approval by the Lilydale shareholders, the Board considered a wide range of factors and received detailed advice and various opinions from the company’s external legal and financial advisors,” stated Don Sundgaard, Lilydale’s chairman of the Board, in a press release. “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.”
The combination of these companies is expected to create a strong national champion in the Canadian meat industry with combined sales revenue exceeding $800 million and a workforce of more than 3,300 employees.
“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 food-service customers and consumers with an even stronger and broader portfolio of premium meat.”
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.”