LITTLE ROCK — Simmons Pet Food Inc. of Siloam Springs is buying Canadian company Menu Foods Ltd. for about $232.9 million, the companies said in a joint news release Monday.
The purchase greatly expands Simmons Pet Food’s operations. Currently, its one plant employs about 200 people making wet and dry private-label food for cats and dogs, as well as several national brands.
Menu Foods, based in Streetsville, Ontario, also has manufacturing facilities in Emporia, Kan., and Pennsauken, N.J., according to its website.
“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,” Mark Simmons, chairman of Simmons Foods Inc. and its affiliates, said in the news release.
Simmons Pet Food is an affiliate of Simmons Foods Inc., which also owns chicken and feed businesses and a metal can manufacturer. The family-owned company employs more than 4,100 workers, and its total annual sales top $1 billion.
In 2007, Menu Foods recalled 60 million cans of dog and cat food after the deaths of 16 pets, mostly cats, that ate its products.
The U.S. Food and Drug Administration said tests indicated the industrial chemical melamine was present in imported wheat gluten used in food made by Menu Foods and a number of other pet food manufacturers.
More than 100 class-action lawsuits against Menu Foods were resolved in a settlement agreement in November 2008, according to the company’s website.
Simmons Foods spokesman Kimmie Provost said the company had no comment regarding whether Menu Foods’ financial troubles since the recall affected the purchase price.
That price includes assumption of Menu Foods’ debt, and represents a 46.8 percent premium over Menu Foods’ closing price of $3.18 per share on the Toronto Stock Exchange on Friday.
Menu Foods’ shareholders will meet in September to vote on the transaction, which is also subject to regulatory approval.
The deal is expected to close early in the fourth quarter, the news release stated.
Business, Pages 21 on 08/10/2010