Opta Food Acquired by Stake TechnologyOpta Food Acquired by Stake Technology
October 28, 2002
BEDFORD, Mass. & TORONTO--Opta Food Ingredients Inc. (NASDAQ:OPTS) entered into a definitive acquisition agreement with Stake Technology Ltd. (NASDAQ:STKL) to sell all outstanding shares of its stock for $2.50 per share for a total of $28 million. Stake will commence an all-cash tender offer, under terms of the agreement, to acquire Opta Food's 10.9 million shares. Opta Food would become a wholly owned subsidiary of Stake under terms of the agreement, with current Opta Food management continuing to operate the business.
This is one of several natural food acquisitions Stake has taken part in within the last month. On Oct. 15, the company announced it planned to acquire Simply Organic Co., a Toronto-based natural and organic food distributor. On Oct. 10, Stake signed an agreement to acquire Vancouver, British Columbia-based Wild West Organic Harvest Co-operative Association, another organic and natural food distributor.
Opta Food's board of directors unanimously approved the acquisition agreement and voted to recommend the tender offer to Opta Food's shareholders. The transaction is subject to certain closing conditions, including the tender of a majority of Opta Food's shares. The deal is expected to close by the end of 2002.
"Our board of directors carefully considered the offer from Stake, as well as Opta Food'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," said Arthur McEvily, Ph.D., Opta Food's president and chief executive officer (CEO). He added that by aligning with Stake, Opta Food will have the resources needed to diversify its customer base and improve plant operating margins through manufacturing efficiencies and increased sales volume.
According to Jeremy Kendall, Stake chairman and CEO, "The addition of Opta Food is integral to our strategy of continuing to build our health-oriented food business."
Opta Foods reported on Oct. 22 that for its latest quarter (3Q02), ended Sept. 30, sales were up 24 percent to $7.2 million. However, a crushing gross margin--2.9 percent of sales--ate at its bottom line, which came in at $236,000. As of market close Oct. 28, the stock was up $.25 to $2.43 per share. Stake's stock had gone up $.05 to $2.78 per share.
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