Maple Leaf Foods’

Strategic Split –Canada Packers

Unlocking value and unleashing potential through the creation of two independent public companies. Introducing Canada Packers Inc., the future name of the new pork company.  

Canada Packers logo

Overview

Maple Leaf Foods will enter a bold new chapter as a focused, purpose-driven, and protein-centric consumer packaged goods company, and Canada Packers Inc. will emerge as a new independent public company that will be unleashed as a global leader in sustainably produced, premium quality, value-added pork with diversified revenue streams and a resilient business structure. Both companies will be uniquely positioned to meet the world’s growing demand for sustainable protein, creating value for all stakeholders, and each primed for growth and positioned to be a leader in its field.

The two companies will continue to have an enduring, strategic relationship with Maple Leaf Foods retaining an ownership interest in Canada Packers, and the two companies entering into a mutually beneficial evergreen supply agreement. Under the supply agreement, Maple Leaf Foods will have reliable access to high quality pork at market prices to meet the needs of its Prepared Foods business, while Canada Packers will have a strong anchor customer in Canada as it grows its already material business around the world.

While the spin-out was originally announced as a taxable transaction, we have identified an opportunity to complete the spin-off as a tax-free “butterfly reorganization” by way of a plan of arrangement. With this new structure, and subject to receiving a favourable advance tax ruling from the Canada Revenue Agency, the transaction is not expected to result in any taxable gain for Maple Leaf Foods.

Once the transaction is complete, Maple Leaf Foods will own about 16% of the shares of Canada Packers, with the balance of the shares being distributed pro-rata to existing Maple Leaf Foods shareholders. 

Maple Leaf Foods will continue to be led by Curtis Frank, President and CEO; Adam Grogan, President and COO; and David Smales, CFO. Canada Packers will go forward with a strong and experienced management team led by incoming President and CEO, Dennis Organ and incoming CFO, Deepak Bhandari.

Canada Packers is expected to be spun off as an independent, publicly traded company in the second half of 2025, subject to receipt of shareholder approval at the upcoming Annual and Special Meeting scheduled for June 11, 2025 and satisfaction of other closing conditions. Full details of the transaction will be included in the Management Information Circular that will be filed on May 12, 2025.

Canada Packers’ Incoming Management Team

On the completion of the Transaction, the Canada Packers Inc. management team will include:

Dennis Organ - Headshot
Dennis Organ

President and Chief Executive Officer, Canada Packers Inc.

Deepak Bhandari - Headshot
Deepak Bhandari

Chief Financial Officer,
Canada Packers Inc.

Lance Mistelbacher - Headshot
Lance Mistelbacher

Senior Vice President, Commodities
and Risk Management, Canada
Packers Inc.

Jonathan Sawatzky - Headshot
Jonathan Sawatzky

Senior Vice President, Hog
Production and Procurement,
Canada Packers Inc.

David Typer - Headshot
David Typer

Senior Vice President, Sales and
Product Optimization, Canada
Packers Inc.

Mauricio Alanis - Headshot
Mauricio Alanis

Vice President, Sustainability,
Canada Packers Inc.

LeeAnn Peters - headshot
LeeAnn Peters

Vice President, Food Safety Quality Assurance (FSQA) and Animal Care, Canada Packers Inc.

Dezi Singh - Headshot
Dezi Singh

Vice President, People,
Canada Packers Inc.

Words from our Leaders

“Canada Packers will offer investors direct access to one of the world’s foremost, premium value-added pork producers with a clear vision to produce meat the right way while delivering industry-leading financial performance.

We are already setting the standard for best practices in sustainability, animal welfare, and high-quality pork production. We have seen positive momentum in the business in recent quarters as pork markets continue to normalize following several years of material disruption, and we are extremely well-positioned as a standalone company to leverage our unique advantages to drive growth and generate value.”

Dennis Organ, Incoming President and CEO of Canada Packers Inc.

“As a newly independent business, we will be able to put an even sharper focus on executing our growth platforms, driving the growth of our leading brands, accelerating the pace of impactful innovation, expanding in new geographies and leveraging our leadership in sustainable meats, as we capitalize on expectations for global protein consumption to nearly double in the coming decades.

Armed with our leading brands and market shares, compelling growth platforms and innovation capabilities, a world-class supply chain, and an exceptional management team with extensive CPG experience, now is absolutely the time to capitalize on what we have built and bring our bold vision to life.”

Curtis Frank, President and Chief Executive Officer, Maple Leaf Foods Inc.

“Under Curtis’ leadership, Maple Leaf Foods is on a path to deliver best-in-class CPG performance, while Canada Packers, under the leadership of Dennis, will be unleashed to leverage its unique capabilities and industry-leading performance to take advantage of new prospects for growth. I am passionate about both of these businesses and have absolute confidence in the powerful potential of this transaction.

Our shareholders will be able to participate in not one, but two strong, independent, sustainable and purpose-driven businesses, each with a clear mandate and investment profile, and all our stakeholders will participate in the shared value we will generate.”

Michael McCain, Executive Chair,
Maple Leaf Foods Inc.

Transaction Related News

Canada Packers logo

May 1, 2025

Maple Leaf Foods Provides Update on Previously Announced Spin-Off of Pork Operations

Resources

Documents

MLF Strategic Split Announcement Investor Presentation

07/09/2024

07/09/2024

PDF2 Mb
MLF Strategic Split Announcement Transcript

07/09/2024

07/09/2024

PDF1 Mb

Past events

Watch MLF Strategic Split Announcement

07/09/2024

07/09/2024

Frequently Asked Questions

1. What is the strategic rationale for spinning off Maple Leaf Foods’ pork business? 

The creation of two independent public companies is expected to unlock value for stakeholders and unleash potential for the two companies as they pursue distinctive value creation opportunities with a sharper focus on the execution of their respective growth strategies. 

Maple Leaf Foods Inc. will enter a bold new chapter as a focused, purpose-driven, and protein-centric consumer packaged goods company, uniquely positioned to meet the world’s growing demand for sustainable protein.

Canada Packers Inc. will go forward as a global leader in sustainably produced, premium quality, value-added pork products, built on a legacy of excellence and innovation. Canada Packers is well positioned to unlock the significant growth potential of its business by investing in low-risk high return opportunities, including increasing volumes, optimizing operations and efficiencies, and building on its favourable sales mix and margins. Canada Packers will be among North America’s largest producers of Raised Without Antibiotics (“RWA”) pork and a key supplier of RWA and conventional pork products to customers in Canada, the U.S., Japan, China and other international markets.

As separate companies, Maple Leaf Foods and Canada Packers each will have focused growth prospects, a sharpened execution focus with their respective dedicated management teams, and the financial independence to pursue their own value creation strategies, all with an enduring commitment to safety and sustainability.

The two companies will have an enduring strategic relationship with Maple Leaf Foods continuing to be a key shareholder in Canada Packers and serving as an anchor customer for Canada Packers. 

Among the many benefits that Maple Leaf Foods expects to realize through the Transaction include:
– Enhanced strategic focus
– Distinct investment propositions to unlock shareholder value
– More focused investments for shareholders
– Mutually optimized supply chain opportunities

2. How was the decision to spin off the pork business made? 

We have been considering the future of the pork business for quite some time, and there are two primary reasons now is the ideal time to execute this transaction. 

First, with markets normalizing, which is positive news for the pork operations and the future outlook. 

Secondly, we have completed a significant capital investment program in our prepared foods business and are ready to take the next step in executing the Maple Leaf Blueprint as a brand forward, consumer packaged goods protein company.

These reasons create significant opportunity for both businesses to generate additional value as stand-alone companies through:
– Enhanced strategic focus
– Distinct investment propositions to unlock shareholder value
– More focused investments for shareholders
– Mutually optimized supply chain opportunities

Maple Leaf Foods’ Board of Directors, a special committee of independent directors, acting with the advice and assistance of their respective financial, legal and tax advisors, and management, have carefully evaluated the transaction and believe it is in the best interests of Maple Leaf Foods, fair to the public shareholders and the most attractive value creation opportunity available.

3. When is the separation expected to be complete? 

The separation is expected to be complete in the back half of 2025, assuming Shareholder approval on June 11, 2025 at our Annual and Special Meeting, and a timely satisfaction of other closing conditions, such as securing our CRA ruling and the typical other required approvals for a transaction of this nature.

4. What are the next steps in the separation process? 

Work is well underway to separate the two companies, including preparation of all the transaction documents and defining the organizational structures that will carry the two companies forward. Late last year we submitted a request to the CRA for an advance ruling to confirm that the structure we have proposed meets all of the “butterfly” rules and can be completed on a tax-free basis. Generally speaking, we expect it to take about nine months from the time of submitting the request for the CRA to issue a ruling.

The Special Committee of the Board has been updating its work with its advisors, and RBC has updated its fairness opinion, which will be included as part of the MIC.

As of May 1, the Company has entered into four agreements to advance the transaction:
– The arrangement agreement (the “Arrangement Agreement”) which, among other things, sets out the steps to effect the transaction;
– The tax matters agreement (the “Tax Matters Agreement”) with Michael H. McCain, McCain Capital Inc. and Jonathan W.F. McCain (the “McCain Parties”) which contains a number of covenants and representations related to compliance with the “butterfly” rules; and
– Two voting support agreements (one with Michael H. McCain and McCain Capital and one with Jonathan W.F. McCain) pursuant to which each McCain Party has agreed to vote in favour of the special resolution to approve the transaction.

Copies of these agreements will be available on SEDAR+ at www.sedarplus.ca when we file our MIC on May 12, 2025, with the Arrangement Agreement and the Tax Matters Agreement being schedules to the MIC and the Voting Support Agreements being filed separately.

We have also established a Separation Management Program that is advancing the planning and execution of the operational separation of the two companies.

Subject to receipt of shareholder approval at the upcoming Annual and Special Meeting scheduled for June 11, 2025 and satisfaction of other closing conditions, Canada Packers is expected to be spun off as an independent, publicly traded company in the back half of 2025.

Full details of the transaction will be included in the MIC that will be filed on May 12, 2025.

5. What are the tax implications to Maple Leaf Foods of this transaction?

Under the “butterfly” structure, the transaction is expected to be completed on a tax-free basis for Maple Leaf Foods. We have submitted an advance tax ruling to the CRA seeking confirmation that our structure aligns with the “butterfly” rules.

6. What dividends will I receive from Maple Leaf Foods? What is the dividend policy and dividend I will receive from Canada Packers?

The current plan is for the initial combined dividends of Maple Leaf Foods and Canada Packers to not be less than Maple Leaf Foods’ annual dividend immediately prior to the completion of the spinoff.

Future dividends will be at the discretion of each company’s board of directors.

Further information on the dividend policies post transaction will be available in the MIC.

7. What is the anticipated capital structure for Canada Packers?

The capital structure for both Canada Packers and Maple Leaf Foods is being evaluated. 

Currently, we are targeting an initial leverage ratio in the range of 2.5x to 3.0x Net Debt to Adjusted EBITDA for Canada Packers.

Further information on the capital structure for both companies will be provided in the MIC.

8. What are the terms of the supply agreement between Maple Leaf Foods and Canada Packers? 

Full details of the supply agreement will be outlined in the MIC. 

The supply agreement has been designed to deliver value for each company, while allowing them to pursue their distinct opportunities.

Maple Leaf Foods will have access to the sustainably produced cuts of meat that it needs for its Prepared Foods business and Canada Packers will be able to sell the balance of their production to customers around the world. 

Canada Packers will also continue to leverage Maple Leaf Foods’ extensive relationships in North American markets under brokerage arrangements, as well as some important IP and trademark assets that present excellent opportunities for Canada Packers as it sets itself up to pursue its business objectives. 

9. Why wasn’t the “butterfly reorganization” structure pursued originally? What has changed?

A “butterfly” structure was considered previously. In the original announcement on July 9, we shared that Maple Leaf Foods did not think we could satisfy the conditions necessary for a successful “butterfly reorganization”.

As the separation work advanced, we continued to work with our tax advisors and McCain Capital on alternatives, and through the combination of reducing Maple Leaf Foods’ retained interest in Canada Packers, and aligning on a set of representations and covenants with McCain Capital, we believe we have landed on a structure that can work, subject to receiving an advance tax ruling from the CRA.

10. What else changed from the original announcement now that you are going with the “butterfly reorganization”?

There are a few other things that changed:
– Maple Leaf Foods’ retained interest in Canada Packers will reduce from 19.9% to around 16%. This small reduction is to ensure that Maple Leaf Foods complies with some of the technical requirements associated with the “butterfly” rules. We continue to believe in the value of the retained interest as we move forward as two independent companies.

– A plan of arrangement is a court approved process, and so we will go through extra steps securing the required court approvals – this is a well-worn path, and we don’t anticipate any issues or any material impact to the timeline.

– RBC has updated its fairness opinion to reflect the new structure. 

11. Why is Maple Leaf Foods retaining an approximate 16% ownership in Canada Packers?

Maple Leaf Foods believes in the future of the pork business as a stand-alone company and its ability to generate value.

The transaction is designed to unlock value and unleash potential in both companies, and at the same time there are some natural synergies between the companies, including Maple Leaf Foods’ desire to maintain a strong relationship and secure sustainably produced meat for its Prepared Foods business.

For these reasons, retaining an ownership interest in Canada Packers makes sense for Maple Leaf Foods. 

12. What is the exchange and ticker symbol that Canada Packers will trade under?

Shares of Canada Packers will trade on the Toronto Stock Exchange.

The ticker symbol is expected to be CPKR.

13. Who is the management team and Board of Directors for Canada Packers?

On completion of the Transaction, Canada Packers Inc. will be led by a seasoned management team with deep industry experience, strong leadership skills and a wealth of technical expertise. The team will include:

Dennis Organ, President and Chief Executive Officer 
Deepak Bhandari, Chief Financial Officer
Lance Mistelbacher, Senior Vice President, Commodities and Risk Management
Jonathan Sawatzky, Senior Vice President, Hog Production and Procurement
David Typer, Senior Vice President, Sales and Product Optimization
Mauricio Alanis, Vice President, Sustainability
LeeAnn Peters, Vice President, Food Safety Quality Assurance (FSQA), and Animal Care
Dezi Singh, Vice President, People,

The Board will be comprised of high calibre directors, the majority of which will be independent. Details on the governance structure and Board composition will be provided in the Management Information Circular.

14. Where can I access historical and pro forma financial information for Canada Packers?

Estimates for LTM pro forma financial performance of key financial metrics were provided in the July 9th announcement press release and we have been updating them each quarter as part of our quarterly earnings releases. We will provide a further update when we release our Q1 2025 results on May 8, 2025.

The MIC will contain full historical and pro forma financial information when it is published on May 12, 2025.

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Investors, members of the media and consumers may contact us in several ways.

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Corporate Secretary

Copies of Maple Leaf Foods’ annual and quarterly reports, Annual Information Form, or other disclosure documents filed with regulatory authorities are available from the Corporate Secretary upon request.