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Maple Leaf Foods sells biodiesel biz for CAD 645 million
Canada-based food processing company Maple Leaf Foods announced it would sell its rendering and biodiesel units to Darling International. The latter would be purchasing the business for CAD 645 million or USD 613.6 million in cash. Darling International is a Texas-based food waste recycling firm. Maple Leaf makes such products as Dempster's Bread and luncheon meat brand Klik.
Maple Leaf experienced a loss for the second quarter that ended on July 31 due to the high prices of wheat and corn. In a statement, Chief Executive Officer Michael McCain said that the sale would help increase the company's profits in selling packed goods. It would also enable it to deploy capital effectively.
Rothsay is the rendering and biodiesel unit of Maple Leaf. Its rendering facilities are located in Ontario, Manitoba, Quebec and Nova Scotia while its biodiesel plant can be found in Quebec.
Octagon Capital Analyst Robert Gibson said that the sale has its benefits and drawbacks for the shareholders of Maple Leaf. "(It's) bad in that Rothsay was a hugely profitable business, and they're going to lose those earnings. But it significantly improves the balance sheet," he told Reuters.