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Stocks D / Darling International Inc.


Subject:  DAR Acquires Rothsay Rendering from Maple Leaf Date:  8/23/2013  9:25 AM
Author:  portastatic Number:  38 of 71

Darling International Inc. (NYSE: DAR), a leading provider of rendering, recycling and recovery solutions to the nation's food industry, today announced that it has entered into a definitive agreement to acquire all of the assets of Rothsay, a division of Maple Leaf Foods Inc. for approximately CAD $645 million in cash. Rothsay is the leading recycler of animal by-products in Canada and provides an essential service for the efficient and environmentally responsible collecting, processing and recapturing of edible and inedible by-products. Rothsay processes raw materials into finished products of fats and proteins. These finished products are sold in domestic and international markets including the United States, Europe, Mexico and South America. Rothsay also manufactures biodiesel for domestic and international markets.

Rothsay has a network of five rendering plants in Manitoba, Ontario and Nova Scotia and a biodiesel operation in Quebec, Canada. Rothsay employs approximately 550 people and generated approximately CAD $85.0 million of EBITDA over each of the past two fiscal years.

Randall C. Stuewe, Darling International's Chairman and CEO said, "The combination of our two companies will create North America's leading provider of independent rendering and recycling services. The opportunity to add Rothsay to our North American platform is an exceptional honor. Rothsay is Canada's premier recycler of animal by-products and a leading biodiesel manufacturer. We look forward to joining forces with Rothsay's management team and employees and to the opportunity this brings our shareholders for future growth."

Darling expects to finance the transaction through a combination of borrowings under a new Senior Secured Revolving Credit Facility and Term A Bank Loan Facility which will be entered into in connection with the closing of the transaction.

Closing of the transaction is subject to customary closing conditions, including Canadian Competition Bureau review.

The second acquisition in a month and this one is a biggie at 645 Million (Canadian… anyone care to convert to USD?). They will be issuing debt to finance the transaction.

DAR has a habit of buying their big competitors and bolting them on pretty well. This reminds me a lot of the Griffin acquisition a few years ago with the added bonus that Rothsay gives international exposures and already has their own biodiesel operation.
DAR shares are up ~6% in pre-market trading.

I’ll post any additional info as I find it.

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