Premium Brands to buy Canada Bread sandwich business

Maple Leaf Foods’ bakery subsidiary Canada Bread has signed a deal to sell its fresh prepared sandwich business in Eastern Canada to food processor Premium Brands.

Terms of the deal weren’t disclosed in either company’s release Monday, apart from supply agreements which will see Canada Bread and Maple Leaf Consumer Foods continue to supply the business with bread and deli meats.

Vancouver-based Premium Brands plans to run the sandwich business under the name Les Aliments Deli Chef. That includes two sandwich plants in Etobicoke, Ont. and Gatineau, Que., a distribution facility at Laval, Que., and DSD (direct-to-store delivery) networks of 14 and 44 trucks in Ontario and Quebec, respectively, supplying convenience stores, gas stations and other retailers.

“This sale will allow us to concentrate our resources and management focus on growth in our core fresh bakery and pasta businesses,” Canada Bread CEO Richard Lan said in his company’s release.

Premium Brands CEO George Paleologou, meanwhile, said the deal “provides us with the manufacturing and distribution infrastructure needed to accelerate our growth into Eastern Canada, and moves us closer to our goal of building North America’s leading prepackaged sandwich manufacturing platform.”

The deal is expected to close Friday (Feb. 18), the two companies said.

Premium Brands said Monday it plans to “reposition” Les Aliments Deli Chef for “future sustainable growth,” which it said will involve between $6 million and $7 million in capital and restructuring costs.

Within the next five years, Paleologou said, Premium Brands expects the division to generate annual sales of $50 million.

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