TSX: MFI TORONTO, May 21 /CNW/ - Maple Leaf Foods (TSX: MFI) today announced that it has reached a definitive agreement to sell its animal nutrition business to Nutreco Holding NV ("Nutreco") for CAD$500 million plus normal closing adjustments. The transaction is expected to close in July 2007. "We are delighted to have reached this agreement with Nutreco," said Michael McCain, President and CEO of Maple Leaf Foods. "This sale is another major step on our transformational journey as we focus on our core value added bakery, meats and meals businesses." "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. 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." Maple Leaf Foods is reorganizing 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 the strategy to significantly increase earnings and reduce its exposure to underlying currency and commodity influences. Maple Leaf Animal Nutrition is an independent operating company of Maple Leaf Foods, with sales of approximately CAD$650 million and 2006 earnings before interest and taxes of approximately $47 million. It is Canada's leading animal nutrition company, employs over 1,200 people, and operates a world-class research and development facility and 18 feed manufacturing facilities across Canada and in New York State. Nutreco is a global leader in the animal nutrition and fish feed business, with principal activities including the processing and marketing of a full range of complete feed and premix products for poultry, swine, dairy, beef and aquaculture producers. Headquartered in the Netherlands, Nutreco operates 75 production plants in 20 countries and employs approximately 8,000 people. The company had sales of approximately EUR(euro)3 billion in 2006. RBC Capital Markets was the financial advisor to Maple Leaf Foods on the transaction. Maple Leaf Foods Inc. is a leading food processing company, headquartered in Toronto, Canada. The Company employs approximately 24,000 people at its operations across Canada and in the United States, the United Kingdom and Asia, and had sales of $5.9 billion in 2006.
For further information: Michael Vels, Chief Financial Officer, Maple Leaf Foods Inc, (416) 926-2048