Canadian consumer packaged meats company Maple Leaf Foods has decided to spin off its pork business, paving the way for future growth through two independent public companies.
The planned separation is expected to be completed in 2025 and the name of the new pork business will be disclosed in due course, the company noted.
“This transaction is the start of a new era to unlock the full potential of two outstanding businesses, each with a distinct value proposition and growth opportunities,” explained Curtis Frank, president and CEO of Maple Leaf Foods.
“As separate companies, Maple Leaf Foods and the new pork company will each have exciting prospects, a sharpened execution focus with its own dedicated management team, and the financial independence to pursue its own value creation strategy, all with an uncompromising commitment to safety and sustainability,” Frank added.
The board of directors of Maple Leaf Foods has approved the spinoff on the recommendation of a special committee of the board, composed entirely of independent directors.
The decision also has the full support of Maple Leaf Foods’ largest and controlling shareholder, McCain Capital Inc., and the McCain family.
The Transaction
Maple Leaf Foods will retain 19.9% ownership in the new company, and the two companies will enter into an evergreen pork supply agreement.
The move will deliver value for both businesses, allowing them to pursue individual growth opportunities.
As part of the agreement, the new company will supply quality, sustainable pork at market prices to Maple Leaf Foods.
In turn, Maple Leaf Foods will provide the new pork business with brokerage services in North America, as well as certain other services.
Maple Leaf Foods will continue to be led by president and CEO, Curtis Frank; president and COO Adam Grogan; and finance chief, David Smales.
Leadership
The spun-off unit will be led by Dennis Organ, who joined Maple Leaf Foods in February 2023 as president, Pork Complex.
Organ is an experienced industry executive with over 27 years of experience in the food industry, including 11 years with Smithfield Foods.
He held several senior leadership roles at Smithfield Foods, including chief operating officer and chief executive officer.
Michael H McCain, executive chair of Maple Leaf Foods, stated, “This is the right transaction at the right time as we move forward with our sustainability vision, seeking to create value for all stakeholders.
“Under Curtis’ leadership, Maple Leaf Foods is on a path to deliver best-in-class consumer packaged goods performance, while the new pork company, 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.”
