MISSISSAUGA, ONTARIO — Maple Leaf Foods Inc. is breaking up. The company’s board of directors has approved a plan to spin off the company’s pork business and create two publicly traded companies.

“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,” said Curtis Frank, president and chief executive officer 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.”

Maple Leaf Foods will retain 19.9% of the to-be-named pork company and the two businesses will enter into a pork supply agreement that will provide raw materials for Maple Leaf’s prepared foods business.

“This is the right transaction at the right time as we move forward with our sustainability vision, seeking to create value for all stakeholders,” said Michael H. McCain, executive chair of Maple Leaf Foods. “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.” 

McCain added that he is passionated abou both of these businesses and has 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,” he stated.

The separation is scheduled to be completed in 2025 and, in the end, will leave Maple Leaf Foods as a consumer packaged goods company with such brands as Maple Leaf, Schneider’s, Greenfield, LightLife, Lunch Mate and others.

The pork company will continue to supply raw materials and value-added pork products in North America. In addition to the supply agreement with Maple Leaf Foods, the business will enter into a brokerage agreement to use the company’s North American sales network.

Maple Leaf Foods will continue to be led by Frank, Adam Grogan, president and chief operating officer, and David Smales, chief financial officer.

Dennis Organ, incoming CEO, will lead the new pork company. He joined Maple Leaf Foods in February 2023 as president of its Pork Complex.

“The new Pork Company 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,” Organ said. “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.”

The company stated that detailed information about the transaction and the new pork company would be included in carve-out financial statements and pro forma financial information offering the expected impact of the separation. The statement would consist of the prospectus and management information circular provided to shareholders in connection with the transaction.

Preliminary estimates for selected financial information for the new pork company come from the last twelve months ending March 31, 2024, and include the estimate of the transaction's effects.

Maple Leaf showed that the pro forma adjusted EBITA for the new pork company during this period would have been approximately C$70 million. The pro forma adjusted EBITA for Maple Leaf Foods, excluding the pork business, during this period would have been approximately $395 million.