Maple Leaf Foods to sell frozen potato business to Cavendish Farms

Maple Leaf Foods has entered into an agreement to sell its frozen potato business, Maple Leaf Potatoes, to Cavendish Farms for C$60m ($60.75m).

The business, which has annual sales of C$75m ($75.93m), includes a 142,000ft² facility in Lethbridge, Alberta, Canada.

The facility produces a range of frozen French fries, hash browns and speciality potato products for customers in Canada, the US, and key export markets.

It is located close to southern Alberta’s prime agricultural region, which is known for high yields of potatoes.

Cavendish Farms president Robert Irving said that the acquisition will make the company more competitive, while strengthening its capabilities to serve its customers in North America.

"It enhances our national distribution network in the foodservice and retail sectors in Canada and builds on our strong position in the United States," Irving added.

Cavendish Farms noted that it will continue to produce and market all the products that are produced by Maple Leaf Potatoes, and maintain all existing customer relationships.

It also plans to retain the 135 staff currently employed at the Lethbridge facility.

The transaction is expected to be completed by the end of December 2012.

Maple Leaf Foods plans to use the proceeds from the sale to lower its debt.

Cavendish Farms, an affiliate of Canadian conglomerate company JD Irving, produces frozen and potato products for retailers, restaurants and institutions in North America and international markets.

Maple Leaf Foods, based Toronto, Canada, is involved in the bakery, meals and meat segments. It employs 19,500 people across Canada, the US, Europe and Asia.

---

Image: Cavendish Farms expects the acquisition of Maple Leaf Potatoes to strengthen its presence in North America and make it more competitive. Photo courtesy of CNW Group/Cavendish Farms.