Nutreco to acquire Maple Leaf's animal nutrition unit

by Eric Schroeder
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TORONTO — Nutreco Holding n.v., a leader in the animal nutrition and fish feed sector, agreed to acquire the animal nutrition business of Maple Leaf Foods for C$500 million ($460.8 million) plus normal closing adjustments. The transaction is expected to close in July.

"I am very pleased with this transaction as it allows us to establish a leading position in North America with good growth potential," said Juergen Steinemann, chief operating officer, Nutreco. "This acquisition also provides a solid platform for further steps in this region."

Michael McCain, president and chief executive officer of Maple Leaf Foods, said the sale "is another major step" in Maple Leaf’s transformation into a core value-added bakery, meats and meals business.

"Our animal nutrition business is a leader in Canada with a great management team, dedicated employees and excellent prospects, but it does not fit our new strategy," Mr. McCain said. "I am very pleased that Nutreco recognized the value of this business. The transaction will result in a significant de-leveraging of our balance sheet and provide Maple Leaf with even more flexibility to re-invest in our value added businesses."

In shedding its animal nutrition business, Maple Leaf said it will reorganize its protein value chain operations, which include its animal nutrition, hog production, and fresh and further processed meats operations, to focus on growth in its value-added meat and meals businesses. The company is on track to complete this process by the end of 2009, with a goal of significantly increasing earnings and reducing exposure to underlying currency and commodity influences.

Maple Leaf Animal Nutrition is an independent operating company of Maple Leaf Foods, with sales of approximately $650 million and 2006 earnings before interest and taxes of approximately C$47 million. The company is Canada’s leading animal nutrition company, employing more than 1,200 people, and operating a world-class research and development facility and 18 feed manufacturing facilities across Canada and in New York state.

Headquartered in The Netherland, Nutreco’s principal activities include the processing and marketing of a full range of complete feed and premix products for poultry, swine, dairy, beef and aquaculture producers. Nutreco operates 75 production plants in 20 countries and employs approximately 8,000 people. The company had sales of approximately €3 billion in 2006.

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