Lakeside Operation Sinks: Tyson Sells to XL Foods

CANADA – A preliminary agreement has been reached to sell one of Canada’s largest beef processing operations. Tyson say the decision follows a long-term stratergy further afield.
calendar icon 27 June 2008
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Tyson Foods, Inc. has signed a letter of intent to sell the packing, feedyard and fertilizer assets of Lakeside Farm Industries Ltd and its subsidiary Lakeside Packers, to XL Foods Inc., a Canadian-owned beef processing business.

The C$107 million transaction includes C$57 million, which will be paid at closing. The remaining C$50 million, plus interest, will be paid over a five-year period following closing.

The transaction remains subject to government approvals, the receipt of commercially reasonable financing by XL and the execution of a definitive agreement by the parties. Both companies anticipate completing the sale by the end of September.

“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 Farm Industries, based in Brooks, Alberta, is a diversified agribusiness involved in cattle feeding, slaughtering and processing, as well as retail fertilizer production and farming. Lakeside currently employs 2,300 Team Members and currently 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 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.”

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