The company announced its intent to make this acquisition in June.
Located in Bradford, Ontario and Drummondville, Quebec, the two plants collectively process approximately 32 million kilograms of chicken annually.
Maple Leaf has also secured 100 percent of the processed chicken volume from Cericola's primary processing plant located in Schomberg, Ontario, and holds an option to acquire this asset and associated plant supply in three years.
Cericola specializes in air-chilled processing of raised without antibiotics (RWA) and animal by-product free and organic poultry products. This acquisition provides Maple Leaf Foods with additional supply and value-added processing capability to advance its leadership in higher value categories. Maple Leaf Foods has transitioned most of its flagship Maple Leaf Prime chicken brand to Prime RWA, where the Canadian market is growing at approximately 25 percent annually. Chicken is the most consumed and fastest growing meat protein segment in North America.
The transaction was financed from a combination of cash-on-hand and drawings under the existing credit facility. The acquisition is expected to be accretive to Maple Leaf's earnings in 2018.
Other industry mergers and acquisition activity
In other merger and acquisition news concerning the North American poultry industry, George’s Inc. in September announced its intent to acquire Ozark Mountain Poultry (OMP). Tyson Foods is in the process of acquiring Keystone Foods from Marfrig Global Foods.