Canadian food processor Maple Leaf Foods has agreed to acquire Smithfield Foods’ Canadian food processing subsidiary Schneider Corporation for US$378m, including the assumption of Schneider’s outstanding debt.
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Smithfield said the purchase price represents nine times Schneider’s EBITDA (earnings before interest, taxes, depreciation and amortisation) in fiscal 2003.
Smithfield acquired a 63% interest in Schneider in November 1998 in a share exchange valued at $70m, plus the assumption of $57m in debt. In November 2001 the company completed the acquisition for the remaining interest in Schneider in a share exchange valued at $51m.
Kitchener, Ontario-based Schneider had sales of C$1.24bn (US$0.92bn) and earnings from operations of C$54.1m for the fiscal year ended 27 April. The unit employs some 5,000 people at its 20 Canadian facilities, reported Reuters.
The acquisition is expected to close by year-end or early 2004, subject to normal conditions, including obtaining clearance from the Canadian Competition Bureau.
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