McCain Foods Completes Ore-Ida Food Service Acquisition

With its purchase of the Ore-Ida food service business from Ore-Ida Foods, Inc. (a subsidiary of H.J. Heinz Company (NYSE: HNZ)) approved by regulators and completed, McCain Foods, the world's largest frozen french fry producer, is sending a clear message of its intention to be a serious player in the U.S. market.

The $500 million deal boosts the U.S. McCain operation to a solid No. 2 position in both food service frozen french fry and frozen appetizer sales. This is in addition to McCain Foods' existing No. 2 ranking in retail frozen potato products, and its strong regional retail frozen pizza brand, McCain Ellio's.

"Without a doubt, McCain Foods is committed to the U.S. market," said David L. Bere, president and CEO of McCain Foods, Inc., the U.S. subsidiary of McCain Foods Limited. "We now have the strategic geographic positioning to more efficiently serve our customers across the country, and the Ore-Ida brands we've added give us some of the top brands in the food service industry."

New additions to the McCain Foods product line include the Premium House and Smart Fries potato brands. McCain Foods also has acquired rights to the Ore-Ida brand name for food service potato products.

It's on the food service side that McCain Foods expects to see the greatest impact from the deal, both through expanded production capacity and the new appetizer lines.

Bere predicts that the appetizer lines will provide a boost to the food service business in the form of new product categories. As part of the purchase, McCain Foods has rights to the Hot Bites, Moore's, Golden Crisp, Domani and Dyna Bites brands for the food service market.

"Food service is the growth engine of the food business in the United States," said Bere. "Our No. 1 priority is to be a major player in this business."

The acquisition gives McCain Foods nine plants in the U.S. and nearly 5,500 employees. Existing McCain potato processing plants in Easton, Maine; Clark, S.D.; and Othello, Wash., and a pizza production plant in Lodi, N.J., are being supplemented by the former Ore-Ida potato processing and appetizer plants in Burley, Idaho; Grand Island, Neb.; and three in Wisconsin; Plover, Fort Atkinson and Rice Lake.

Worldwide, McCain has more than 55 processing plants in 10 countries on four continents.

"We're very excited about this acquisition -- both the plants we're adding and the good people joining us," said Bere. "We will be investing in these plants to expand our business even further. McCain is very well positioned for growth in the U.S."