August 27, 2013
Maple Leaf to sell rendering and biodiesel business to Darling International
Maple Leaf Foods has entered a definitive agreement to sell Rothsay, its rendering and biodiesel business, to Darling International Inc. of Irving, Texas, in order to focus on the consumer packaged foods market.
"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 Michael McCain, President and CEO. "We are delighted to have concluded almost a year-long process with an agreement with Darling, the North American leader in food waste recycling. The sale will support future investments in our consumer facing businesses and allow Darling to build on Rothsay's strong capabilities and deep customer relationships."
Rothsay had EBITDA of approximately US$85 million in 2012. Proceeds from the transaction of approximately US$645 million will initially be used to pay down debt. Upon completion of the prepared meats strategy, management will consider appropriate deployment of excess capital, including reinvesting in its core consumer packaged food businesses or returning excess capital to shareholders.
Rothsay is the leading rendering company in Canada and a leading producer of biodiesel. The business operates six rendering plants located in Manitoba, Ontario, Quebec and Nova Scotia and a biodiesel facility in Quebec.
Maple Leaf plans to enter into a long term contract with Darling to receive by-products recycling services at competitive market rates.
Darling International Inc. is the largest and only publicly traded provider of rendering and bakery residuals recycling solutions to the US food industry. The company recycles beef, poultry and pork by-product streams into useable ingredients such as tallow, feed-grade fats, meat and bone meal, poultry meal and hides.
Maple Leaf Foods Inc. is a leading food company headquartered in Toronto, Canada and had sales of US$4.9 billion in 2012.