Mergers and acquisitions in the food industry continue this week with acquisitive Canadian company Stake technology taking over US ingredients company Opta Food Ingredients at the price of €28m. The move marks a bid by Stake to build on its health-oriented food business.
Earlier this month Stake Technology announced that it had purchased privately owned Simply Organic, a Toronto-based distributor of organic and natural food products, and Wild West Organic Harvest Co-Operative Association (Wild West), also a Canadian distributor of organic and natural food products.
Commenting on the acquisition, Opta Ingredients president and chief executive officer Arthur J. McEvily said: "Our board of directors carefully considered the offer from Stake, as well as Opta's other strategic alternatives, and believes that this transaction is in the best interests of our shareholders and also provides long-term growth opportunities for our business.
We believe the relationship with Stake will provide the future resources necessary to support our strategy of diversifying our customer base, improving our plant operating margins through manufacturing efficiencies and increased sales volume, and as a result, steadily increase our bottom line performance."
Last week Opta had reported a revenue increase of 24 per cent to $7.2 million (€7.3m) for the third quarter ended 30 September 2002, up from $5.8 million for the third quarter of 2001.
Under the agreement, Stake will acquire 10.9 million common shares of Opta Food for $2.50 per share. Stake, which has food, environment/industrial and steam expulsion businesses, hopes to close the deal before year is finished.
Jeremy N. Kendall, Stake chairman and chief executive officer, commented: "Opta has an excellent reputation for product quality, innovation and technical expertise in developing value-added solutions for major food and food service companies.
The acquisition of Opta will be a superb addition to our growing portfolio of food companies and, having turned the corner on profitability two quarters ago, is expected to be accretive to our future earnings."