Maple Leaf Foods to acquire hog producer Puratone

Maple Leaf Foods has entered into an agreement to acquire Puratone, a hog producer based in Manitoba, Canada, for C$42m ($42.03m), as part of its plan to ensure consistent hog supply to its processing facility in Brandon, Canada.

The acquisition will include livestock, facilities and interests in some joint ventures.

Subject to court and regulatory approvals, the acquisition is expected to be completed within a month.

Maple Leaf Foods president and CEO Michael H McCain said that the deal will ensure steady hog supply to the Brandon facility, which is an important supplier to the company’s prepared meats and pork business.

"This investment reflects our ongoing commitment to securing a strong future for our value added pork operations in Manitoba, which are a vital part of the province’s economy," McCain added.

Puratone owns about 50 barns in Manitoba that are located close to Maple Leaf’s Brandon plant, and produces approximately 500,000 hogs a year.

The company also operates three feed mills, which support its hog production business.

Following the acquisition, Maple Leaf Foods will be able to secure 30% of the hog supply required for the Brandon facility, and will produce 1.2 million hogs a year.

Maple Leaf Foods noted that an integration team will take up the process of integrating both Maple Leaf Foods and Puratone operations.

Puratone, which has suffered losses due to high grain costs as a result of US drought, entered court protection in September 2012, and it owes a total of C$86m ($86.06m) to three secured creditors: Farm Credit Canada, Bank of Montreal and Manitoba Agricultural Services.

Maple Leaf Foods, headquartered in Toronto, Canada, operates across the following divisions: meat products, agribusiness, and bakery, and has a presence in Canada, the US, the UK and Asia.