Arkansas-based Simmons Pet Food Inc. has agreed to pay $239-million to acquire Menu Foods Income Fund (MEW.UN-T4.721.4544.34%) , a Toronto-area company involved in a massive recall of pet food three years ago.
The transaction, announced early Monday, comes after the Mississauga company carried out a strategic review and put itself up for sale.
Menu Foods recalled at least 60 million cans and pouches of pet food in 2007 after contaminated products from China got into the company’s supply chain and caused some animal deaths.
The company survived but the recall cost it tens of millions of dollars, produced big losses, led to cancelled contracts and battered its stock price.
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The deal is subject to the approval of the fund’s unit holders by two-thirds of the votes cast at a special meeting, expected to be held in September. The sale is expected to close in the fourth quarter.
"With this transaction, we are adding one of North America’s leading private label pet food manufacturers to our portfolio and further strengthening our company," said Mark Simmons, chairman of Simmons Foods Inc. and affiliates.
"Menu is a great company with an excellent management team and employees that are among the best in our industry, and we look forward to welcoming them into the Simmons family."
Menu Foods Income Fund is the indirect owner of Menu Foods Ltd., a leading private-label contract-manufacturer of dog and cat foods.
The Simmons group includes Simmons Pet Food, a manufacturer of wet and dry pet food, and dry ingredients for dairy, cattle, aquaculture and pet food manufacturers.
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