Regina, Saskatchewan-based agri-business co-operative Saskatchewan Wheat Pool has entered into an agreement to sell substantially all of the assets of CSP Foods to Dawn Food Products (Canada), a subsidiary of Dawn Foods.
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Mayo Schmidt, CEO of SWP, commented: “The Pool has in place a comprehensive program designed to strengthen its balance sheet and de-leverage the company.
“We are reducing costs, improving working capital, and refocusing resources on our core operations. Our divestiture initiative is a key component of that plan and the Pool expects to receive net cash proceeds from this sale of approximately C$35m (US$21.9m), subject to adjustments and holdbacks.
“For CSP Foods, the transaction is a natural fit since we currently sell Dawn Foods’ products into Canada under a licensing agreement.”
Dawn Foods CEO Ron Jones said: “We are extremely pleased to welcome CSP into our family-owned business. The acquisition allows Dawn to continue with our mission of being the leading bakery supplier to retail, in-store, wholesale and foodservice customers.”
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By GlobalDataThe agreement is subject to regulatory approvals and usual closing conditions. The sale is expected to close on 25 February 2002. SWP expects to record an after tax loss of approximately C$14m or C$0.37 per share in its third quarter of fiscal 2002.
CSP Foods is a wholly owned division of SWP. An integrated manufacturer and distributor of food ingredients to the bakery, food services and retail grocery sectors, CSP Foods has production operations in Saskatoon, Saskatchewan and Etobicoke, Ontario.
