Vancouver, British Columbia - Fletcher's Fine Foods Ltd. announced it has entered into a definitive agreement to purchase a 26.3% interest in a holding company that owns Piller Sausages & Delicatessens Limited and Kretschmar Inc. (the “Piller Group”). “The Piller Group manufactures and markets a full line of high-quality specialty deli meat products and owns and operates two modern facilities located in Waterloo and Don Mills, Ontario. The Piller Group also has a 50% interest in Golden Valley Farms Inc., which owns and operates a state of the art value-added poultry-processing facility in Arthur, Ontario. The Piller Group's 1998 fiscal year sales were in excess of $100.0 million. Fletcher's has options to increase its ownership in the Piller Group to 40% at any time over a five-year period. The transaction is scheduled to close on February 2,1999.
The consideration includes cash and Fletcher's shares. The majority of the cash consideration will be used as expansion capital for the Piller Group.
Mr. Willi Huber, Piller Group President and CEO, stated, “This is a great day for the Huber family, our employees and our customers. In order to continue to aggressively grow our company we needed capital and a reliable and consistent source of high quality raw material. Fletcher's was able to provide solutions for both needs.”
“We are both honored and excited to have the opportunity to enter into a strategic alliance with the Huber family and the companies they nurtured over the last forty years. We have always been impressed by the excellence of their products, their meat processing expertise and their work ethic,” said Fred Knoedler, Fletcher's President and CEO. “This investment positions Fletcher's as the largest deli supplier in Canada and as one of the largest specialty deli suppliers in North America. The Piller's organization will provide us access to manufacturing capacity and expertise as well as marketing and distribution infrastructure in Ontario.”
“This initiative is consistent with our strategy to find downstream opportunities for fresh pork especially in light of our recent investment in the Red Deer, Alberta hog processing facility,” said Don Loewen, Fletcher's Chairman. “It is also consistent with Fletcher's strategy of developing its branded consumer products business focussing on acquiring or partnering with companies with strong regional specialty brands and strong management teams.”
“The Huber family has done an excellent job growing the Piller Group's business consistently and profitably over the years. Their products and expertise complement our Western Canadian deli business,” said George Paleologou Fletcher's Vice-President and CFO. “We are confident that this capital allocation decision combined with our $28.5 million investment in the expansion of our Red Deer, Alberta hog processing facility and our six recent acquisitions position us well for achieving our targeted return on capital in the future,” added Mr. Paleologou.
Fletcher's has been engaged in the food processing business since 1917 and has manufacturing facilities in Alberta, British Columbia, Oregon, Saskatchewan and Washington.
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