SPRINGDALE, Ark. (AP) -- One of Canada's largest beef-processing plants, Lakeside Farm Industries of Brooks, Alberta, will be sold to a Canadian company, XL Foods Inc., in a deal worth about $107 million, owner Tyson Foods Inc. said Wednesday.
Tyson said it had signed a letter of intent for the sale, and expects to complete the deal by the end of September. A top Tyson official said the sale would allow the company to focus more on the Latin American markets and Asia.
The announcement valued the transaction at C$107 million, with C$57 million of that to be paid to Tyson at closing, while the remainder, plus interest, will be paid over a five-year period. The values expressed in Canadian dollars represent approximately the same values in U.S. dollars, as the two currencies are trading near a 1-to-1 exchange rate.
Tyson said the sale includes the packing, feedyard and fertilizer assets of Lakeside Farm Industries Ltd and its subsidiary Lakeside Packers. But Tyson said it would retain the finished- product inventory, accounts receivables and accounts payables of the Lakeside operations as of the closing date.
The transaction is subject to government approvals as well as financing arrangements to be made by XL.
"Lakeside is one of the premier beef-processing operations in Canada and has operated successfully for many years," said Richard L. Bond, president and CEO of Tyson Foods. "However, Lakeside no longer fits the long-term strategy of our company, as our current international strategy is focused primarily in Asia, Mexico and South America."
Lakeside currently employs 2,300 workers and has the capacity to slaughter and process 4,700 cattle per day. The commodity boxed beef produced by the plant is primarily sold to customers in Canada and the U.S.
XL Foods said it plans to continue operating the Lakeside facility after the sale is completed.
"We believe the Lakeside plant and cattle feeding operation will complement our other beef operations in Alberta and Saskatchewan," said Brian Nilsson, co-chief executive officer of XL Foods Inc. and Nilsson Bros. Inc. "In addition, it will help strengthen our ability to meet the needs of our North American customer base."
XL is part of the Nilsson Bros. Group, a Canadian cattle feeding and marketing company.