Canadian meat packing company Maple Leaf Foods (MFI.TO) is hunting for acquisitions in the United States, after years spent upgrading old factories and shedding business lines, its chief executive officer said on Wednesday.
Maple Leaf, which reported on Wednesday its profits doubled in the fourth quarter, sees growth opportunities from meat produced humanely and without antibiotics, and from snack foods and alternative proteins made from soy and other plants.
On Tuesday, the company said it would buy U.S.-based Lightlife Foods Inc, a manufacturer of plant-based protein foods, for $140 million.
It was Maple Leaf's first material deal since 2004, and represents broadly the expected price level of future acquisitions, CEO Michael McCain said in an interview.
The company, which has a C$4 billion ($3.04 billion) market cap, intends to remain a patient buyer, but after returning to healthier profits, Maple Leaf's opportunities are the highest "in decades," he said.
"We have a very active portfolio today of opportunities, but that doesn't necessarily mean we complete transactions," McCain said. "It's important for us to have a very large pipeline but equally to be very disciplined."
The Toronto-based company will use cash on hand to pay for acquisitions, McCain said. It had nearly C$404 million at the end of 2016.
Fourth-quarter net earnings more than doubled to C$76.2 million, or 56 Canadian cents per share.
On an adjusted basis, Maple Leaf earned 31 Canadian cents per share, missing analysts' average estimate of 33 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Total sales for the Canadian pork processor fell about 5 percent to C$828.2 million, below analysts' average estimate of C$860.5 million. Excluding the contribution of the 53rd week in 2015, sales increased by about 2 percent.
McCain, 58, has steered Maple Leaf since 1995, and may be best known as the face of the company's contrite handling of a 2008 tainted meat recall, which involved the deaths of 22 people.
The company also announced changes to its governance agreement with McCain, its largest shareholder, and an affiliated organization. It allows McCain to bump up his stake to 45 percent from 35 percent currently, or to take it over entirely.
The move was made to reflect changes in Canadian securities regulations, and does not signal plans to privatize or sell the company, McCain said.
Maple Leaf's shares gained 0.3 percent at C$29.94 in Toronto.
(Reporting by Rod Nickel in Winnipeg, Manitoba; additional reporting by Komal Khettry in Bengaluru; Editing by Savio D'Souza and Lisa Shumaker)