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Lilydale Bought by Sofina for $130 Million


February 18, 2010
By Canadian Poultry

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NEWS HIGHLIGHT

Lilydale Bought by Sofina for $ 130 Million
Lilydale Inc. is being acquired by Ontario-based Sofina Foods for about $ 130 million, ending Lilydale's 70 year-history as a producer-controlled poultry processor.

Feb. 18, 2010 – Lilydale Inc. is being acquired by Ontario-based Sofina Foods for about $130 million ending Lilydale's 70 year-history as a producer-controlled poultry processor.

Sofina , which is privately owned, is based in Markham, Ont. It will pay about $75 million in cash and debentures, and assume Lilydale's $55 million in debt.

Sofina also pledged to spend $20 million over the next two years to upgrade Lilydale’s production capacity.

Lilydale shareholders will receive $10 a share in cash and $5.43 per share in four per cent debentures, which will mature in October, 2011.

"Over the past several years, Lilydale has been approached by a number of different companies regarding potential transactions; however, the Company did not feel that any of those potential suitors were the right fit until now," said Don Sundgaard, Lilydale's Chairman of the Board. "In deciding to recommend this transaction for approval by the Lilydale shareholders, the Board of Directors considered a wide range of factors and received detailed advice and various opinions from the Company's external legal and financial advisors.

In our view, the consideration to be paid and the terms of the arrangement are fair and appropriate and should be seen as very attractive to all Lilydale stakeholders, from its shareholders through to its customers."

Lilydale's shareholders will be asked to vote on the arrangement at a shareholder meeting to be held on or around April 6, 2010 and, subject to Lilydale shareholder approval and applicable regulatory approvals, the transaction is expected to close in April 2010.

"This is an exciting day for Lilydale as we turn the page of a new chapter in our history," said Lilydale President and CEO Ed Rodenburg. "This year marks our 70th anniversary and, in partnership with Sofina, we look forward to providing our retail and food service customers and consumers with an even stronger and broader portfolio of premium meat products covering all the major proteins, in both primary and further processing. The inherent strengths of the Lilydale and Sofina partnership are clear, and we are confident that our employees, growers, customers and consumers will all benefit."

Sofina's President Michael Latifi said: "The Lilydale brand is a natural fit to complement Sofina's offerings. This partnership works on so many levels, particularly with Lilydale's geographic coverage in the West and their strong brand presence in the marketplace. Together we are very well positioned to deliver accelerated growth to our retail and foodservice customers throughout Canada."

Sofina currently has about 1,200 employees at six facilities and produces mostly beef, poultry and pork processed meats under private labels, and their own Fletchers, Cuddy, Quality Meats and Vienna brands.

Lilydale has 2,100 employees at two Edmonton plants, and facilities in Calgary, Abbotsford and Port Coquitlam, B.C., and Wynyard, Saskatchewan.

Lilydale produces fresh and frozen poultry, deli, sausage and meat snacks.

The combination of Sofina and Lilydale will create a strong national company with combined sales revenue exceeding $800 million and a workforce of over 3,300 employees, according to a Lilydale-Sofina news release. The businesses are highly complementary with Lilydale's strengths in Western Canada and primary processing of poultry being combined with Sofina's strengths in Eastern Canada and further processed products of beef, pork and poultry, the news release said.

Significant staff changes or consolidations are not planned as the result of the purchase.
Lilydale was founded in 1940 as Alberta Poultry Producers Ltd., and took the Lilydale name from the Saskatchewan hometown of the president at that time.

To read an Edmonton Journal article on the history of Lilydale, click here.