Strategic Split
Unlocking value and unleashing potential through the creation of two independent public companies. Introducing Canada Packers Inc., the future name of the new pork company.
Overview
Maple Leaf Foods will continue to pursue its vision to be the most sustainable protein company on Earth, now as a more focused, brand-led consumer packaged goods (CPG) company that will meet the world’s growing need for sustainably produced protein. The new pork company, Canada Packers, will be a world-leading organization which produces meat the right way, sustainably. Through this split, the company can take full advantage of its unique business model to unlock its own significant growth potential.
The two companies will continue to have an enduring, strategic relationship. Maple Leaf Foods will continue as a key shareholder while a mutually beneficial evergreen supply agreement will ensure reliable access to high quality products for Maple Leaf Foods as an anchor customer for Canada Packers.
Maple Leaf Foods will continue to be led by Curtis Frank, President and CEO; Adam Grogan, President and COO; and David Smales, CFO. Canada Packers will go forward with a strong and experienced management team led by incoming CEO Dennis Organ, and incoming CFO Deepak Bhandari.
Canada Packers is expected to be spun off as an independent, publicly traded company in 2025.
Canada Packers’ Leadership Team
Dennis Organ
President of Maple Leaf Foods’ Pork Complex and incoming CEO of Canada Packers Inc.
Deepak Bhandari
Incoming Chief Financial Officer of Canada Packers Inc.
Words from our Leaders
“Canada Packers will offer investors direct access to one of the world’s foremost, premium value-added pork producers with a clear vision to produce meat the right way while delivering industry-leading financial performance.
We are already setting the standard for best practices in sustainability, animal welfare, and high-quality pork production. We have seen positive momentum in the business in recent quarters as pork markets continue to normalize following several years of material disruption, and we are extremely well-positioned as a standalone company to leverage our unique advantages to drive growth and generate value.”
— Dennis Organ, President of Maple Leaf Foods’ Pork Complex and incoming CEO of Canada Packers Inc.
“As a newly independent business, we will be able to put an even sharper focus on executing our growth platforms, driving the growth of our leading brands, accelerating the pace of impactful innovation, expanding in new geographies and leveraging our leadership in sustainable meats, as we capitalize on expectations for global protein consumption to nearly double in the coming decades.
Armed with our leading brands and market shares, compelling growth platforms and innovation capabilities, a world-class supply chain, and an exceptional management team with extensive CPG experience, now is absolutely the time to capitalize on what we have built and bring our bold vision to life.”
— Curtis Frank, President and
Chief Executive Officer, Maple Leaf Foods Inc.
“Under Curtis’ leadership, Maple Leaf Foods is on a path to deliver best-in-class CPG performance, while Canada Packers, 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. I am passionate about both of these businesses and have absolute confidence in the powerful potential of this transaction.
Our shareholders will be able to participate in not one, but two strong, independent, sustainable and purpose-driven businesses, each with a clear mandate and investment profile, and all our stakeholders will participate in the shared value we will generate.”
— Michael McCain, Executive Chair, Maple Leaf Foods Inc.
Transaction Related News
October 10, 2024
Introducing Canada Packers Inc.
Resources
Frequently Asked Questions
What is the strategic rationale for spinning off Maple Leaf Foods’ pork business?
The creation of two independent public companies is expected to unlock value for stakeholders and unleash potential for the two companies as they pursue distinctive value creation opportunities with a sharper focus on the execution of their respective growth strategies.
Maple Leaf Foods will be focused on realizing its vision to be the most sustainable protein company on Earth, now as a more focused, purpose-driven consumer packaged goods company.
Canada Packers will be unleashed as a world-leading pork business, with its own unique business model and significant growth potential.
The two companies will have an enduring strategic relationship, with Maple Leaf Foods continuing to be a key shareholder in Canada Packers and serving as an anchor customer for the new pork company.
The transaction supports the continuation of our leading sustainability practices across both companies.
How was the decision to spin off the pork business made?
We have been considering for the future of the pork business for quite some time, and there are two primary reasons now is the ideal time to execute this transaction.
First, with the pandemic and its impacts behind us, market headwinds are now showing signs of normalization, which is positive for the pork business and its future outlook.
Secondly, we have completed a significant capital investment program in our prepared foods business, and are ready to take the next step in executing the Maple Leaf Blueprint.
These reasons create significant opportunity for both businesses to generate additional value as stand-alone companies.
The decision was made by the Boad of Directors after extensive detailed analysis by management, and its third party experts, together with oversight by an independent Special Committee of the Board and their independent advisors.
When is the separation expected to be complete?
The separation is expected to be complete in 2025.
What are the next steps in the separation process?
The next steps in the separation process are to file a Management Information Circular (MIC) and prospectus level disclosure about Canada Packers. These materials will contain detailed information about the transaction including the capital structure, tax consequences, governance agreement, supply agreement, and shareholder approvals, as well as historic carve-out financial information and pro forma financial information.
Shareholders will vote at a Special Meeting of Shareholders following the publication of the MIC.
Other approvals are also required and include normal course items such as final Board approval and lender consents. Full details about required approvals will be outlined in the MIC.
What are the tax implications to current Maple Leaf Foods shareholders with this transaction?
The spin-off transaction is intended to be completed as a Return of Capital.
This transaction is taxable for Maple Leaf Foods.
To the extent shares of Canada Packers cannot be distributed in connection with a reduction in stated capital of Maple Leaf Foods, it expects to distribute Canada Packers shares as a dividend.
More information on the expected tax implications of the transaction will be shared in the MIC.
What dividends will I receive from Maple Leaf Foods? What is the dividend policy and dividend I will receive from Canada Packers?
Dividend outlooks and policies have not been finalized for Maple Leaf Foods or Canada Packers at this time.
Dividend policy is a matter for the Board of Directors of each company.
Further information on dividend policy at Maple Leaf Foods post transaction close will be available in the MIC.
What are the terms of the supply agreement between Maple Leaf Foods and Canada Packers?
Full details of the supply agreement will be outlined in the MIC.
The supply agreement has been designed to deliver value for each company, while allowing them to pursue their distinct opportunities.
Maple Leaf Foods will have access to the sustainably produced cuts of meat it needs for our Prepared Foods business and Canada Packers will be able to sell the balance of their production to customers around the world.
Canada Packers will also continue to leverage Maple Leaf Foods’ extensive relationships in North American markets under brokerage arrangements, as well as some important IP and trademark assets that present excellent opportunities for Canada Packers as it sets itself up to pursue its business objectives.
Why is Maple Leaf Foods retaining 19.9% ownership in Canada Packers?
Maple Leaf Foods believes in the future of the pork business as a stand-alone company and its ability to generate value.
The transaction is designed to unlock value and unleash potential in both companies, and at the same time there are some natural synergies between the companies, including Maple Leaf Foods’ desire to maintain a strong relationship and secure sustainable produced meat for its Prepared Foods business.
For these reasons, retaining an ownership interest in Canada Packers makes sense for Maple Leaf Foods.
What is the exchange and ticker symbol that Canada Packers will trade under?
Shares of Canada Packers will trade on the Toronto Stock Exchange.
The ticker symbol has not been determined at this time.
Who is the leadership team and Board of Directors for Canada Packers?
Dennis Organ, current President of the Pork Complex at Maple Leaf Foods, will be the CEO for Canada Packers. Dennis is a distinguished industry executive who joined Maple Leaf Foods in 2023 after more than 27 years of experience in the North American food industry, including 11 years with Smithfield Foods where he held a variety of roles, including CEO.
Deepak Bhandari has been named Chief Financial Officer for Canada Packers.
Other leadership team appointments will be shared as they are finalized.
The Board of Directors for Canada Packers has not been finalized.
Full details regarding the governance structure for Canada Packers will be described in MIC and prospectus disclosure to be filled.
Recruiting for high caliber independent directors is underway and expected to be complete before the anticipated transaction close.
Where can I access historical and pro forma financial information for Canada Packers?
Initial estimates for LTM pro forma financial performance of key financial metrics were provided in the July 9th announcement press release and updated in the second quarter 2024 earnings call press release.
Full pro forma financial information will be provided when we publish the MIC and prospectus disclosure.
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Copies of Maple Leaf Foods’ annual and quarterly reports, Annual Information Form, or other disclosure documents filed with regulatory authorities are available from the Corporate Secretary upon request.