North American food giant to buy B.C. co-generation plant
VANCOUVER, June 10, 2014 – Village Farms International, Inc., one of the largest producers of premium-quality, greenhouse-grown vegetables in North America, announced today it has entered into a Sale and Purchase Agreement to acquire Maxim Power (B.C.), Inc., a wholly owned subsidiary of Maxim Power Corp., for CAD $4.5 million, subject to closing adjustments.
The closing of the acquisition is subject to certain conditions typical for transactions of this type, including various third-party consents. Accordingly, the acquisition is expected to close between June 30, 2014 and August 29, 2014.
The Company intends to satisfy purchase price from cash on hand as well as from funds advanced under a new loan that the Company is currently negotiating with a lender. It is currently anticipated that such a loan will be secured against the new facility. There can be no assurance that all conditions to the acquisition, including requirements to obtain third party consents, will be satisfied or waived.
Maxim Power (B.C.) developed and operates a co-generation facility adjacent to the Company’s greenhouse operations in Delta, B.C., which uses methane gas from the City of Vancouver’s landfill to generate electricity for B.C. Hydro and thermal heat for the Company’s greenhouse facilities. Once acquired, the co-generation facility, which has been in operation since 2004, will continue to convert methane gas from the local landfill to produce electricity under an existing long-term power purchase agreement with B.C. Hydro, as well as generate thermal heat for the Company’s greenhouse operations.
According to Michael A. DeGiglio, President and CEO of Village Farms, “This acquisition is in keeping with the Company’s strong mission of sustainability in farming and growing in a responsible manner. In the short term, we believe enhancements to the co-gen facility will result in more electric generation as well as increased thermal heat for our own facilities. This will increase our ability to further reduce our use of natural gas and decrease our carbon footprint. In the longer term, working with strong partners, we plan to receive clean carbon dioxide from the co-generation facility.”
Mr. DeGiglio continued, “The powerful synergy between a sustainable high-tech farming organization such as Village Farms, energy companies and municipalities builds a strong foundation to better serve the community through cleaner environmental resource initiatives.”
The benefits of this acquisition are numerous.
- Sustainability: This project will decrease Village Farms’ long term dependence on natural gas.
- Conservation: Vancouver land fill waste will be used as a viable energy source decreasing dependence on fossil fuels and reducing the area’s carbon footprint.
- Positive Proactive Energy Management: This is a forward-thinking partnership between local commerce and government.
- Financial Enhancements: This project will allow Village Farms to be more self-sustainable and expand electric and thermal heat generation and is an attractive long term investment for the Company.
- Technology & Energy: The ownership of the facility will enable the Company to advance its high-tech sustainable growing technology both in the local area as well as provide invaluable experience to underpin future growth opportunities.
About Village Farms
Village Farms is one of the largest producers, marketers and distributors of premium-quality, greenhouse-grown tomatoes, bell peppers and cucumbers in North America. This premium product as well as premium product produced under exclusive arrangements with other greenhouse producers is grown in sophisticated, highly efficient and intensive agricultural greenhouse facilities located in British Columbia and Texas.
Product is marketed and distributed under the Village Farms® brand primarily to retail grocers and dedicated fresh food distributors throughout the United States and Canada. Since its inception, Village Farms has been guided by friendly growing methods, growing produce vegetables 365 days a year from its facilities that are healthier for people and the plant. Village Farms is Good for the Earth®.