Michael McCain, president of Maple Leaf FoodsRyan Remiorz
Maple Leaf Foods Inc. says it will sell its Ontario pork processing business to Sun Capital Partners Inc. for about $20-million.
The sale of the Burlington, Ont.-based operation - one of the largest pork processing facilities in Canada - to the private equity firm is expected to close in the next few days.
The agreement includes a long-term contract with Maple Leaf's rendering operations, which collects, recycles and processes animal byproducts.
"This sale will complete the transformation of our fresh pork operations to focus our growth on branded, consumer-focused prepared meats and meals business," said Maple Leaf's chief financial officer Michael Vels in a release.
"We are very pleased to have secured a buyer who will continue to operate the facility, providing ongoing employment to a highly skilled work force, and an important market for Ontario's hog producers."
The Toronto-based food processing company had announced in May that it was putting its Ontario pork processing business up for sale again after a failed attempt to unload the facility at the height of the credit crunch.
The Burlington facility, located west of Toronto, was put on the block in 2008 but interested buyers weren't able to get the necessary financing due to the credit crunch.
The sale marks the last major hurdle in Maple Leaf's restructuring of its protein business, which it began in 2007 with the goal of consolidating its pork processing operations in one facility in Brandon, Man., so it could focus on its branded meat, bakery and meals products.
The sale will reduce Maple Leaf's annual pork processing from over seven million hogs in 2006 to about 4.3 million hogs at the Brandon facility.
The plant currently employs 1,000 people and processes about 1.6 million hogs a year.
Maple Leaf employs more than 23,000 people worldwide and had sales of $5.2-billion last year.
It recently announced a restructuring plan designed to reduce costs and improve profit as the company grapples with weaker sales and the high Canadian dollar. It involves closing some plants and consolidating operations at a new production centre.
Sun Capital Partners, Inc. is a private investment firm focused on leveraged buyouts, equity, debt, and other investments.
Its affiliates have invested in more than 240 companies worldwide with combined sales in excess of $40-billion (U.S.).