Discontinued operations

12 Months Ended

Jan. 02, 2016

Discontinued Operations And Disposal Groups [Abstract]

Disposal Groups Including Discontinued Operations Disclosure Text Block

4. Discontinued Operations

Opta Minerals Inc.

On February 12, 2016, Opta Minerals entered into a definitive acquisition agreement, pursuant to which an affiliate of Speyside Equity Fund I LP, agreed to acquire substantially all the shares of Opta Minerals. The acquisition agreement has been approved by Opta Minerals’ Boards of Directors, which has recommended that Opta Minerals’ shareholders approve the transaction. Also on February 12, 2016, the Company entered into a support agreement pursuant to which it has irrevocably agreed to vote all of its Opta Minerals’ shares in favor of the transaction. The Company expects to receive aggregate proceeds of approximately $4.5 million (C$6.2 million), of which approximately $3.0 million (C$4.2 million) is cash, with the remainder in the form of a subordinated promissory note bearing interest at 2.0% that will mature 30 months following the close of the transaction. Closing of the transaction is subject to receipt of all necessary shareholder approvals and other customary conditions. The sale of Company’s equity interest in Opta Minerals is consistent with its objective of divesting its non-core assets in order to become a pure-play healthy and organic foods company. The Company does not expect to have any significant continuing involvement with Opta Minerals after the closing date.

As at January 2, 2016, the Company determined that Opta Minerals qualified for reporting as a discontinued operation held for sale. The Company recognized a loss on classification as held for sale of $10.5 million, or $7.7 million net of non-controlling interest, to write down the carrying value of Opta Minerals’ net assets to fair value less cost to sell based on the expected proceeds on sale of approximately $4.5 million. The net assets and liabilities of Opta Minerals have been reclassified and reported as held for sale on the consolidated balance sheets as at January 2, 2016 and January 3, 2015. The following table reconciles the major classes of assets and liabilities of Opta Minerals to the amounts reported as held for sale:

	January 2, 2016	January 3, 2015
	$	$
Cash and cash equivalents	1,707	2,170
Accounts receivable	14,676	18,926
Inventories	25,869	34,486
Property, plant and equipment	16,019	22,428
Intangible assets	13,194	26,885
Other assets	3,380	5,110
Loss recognized on classification as held for sale	(10,515)	-
Total assets held for sale	64,330	110,005
Bank indebtedness	12,107	12,953
Accounts payable and accrued liabilities	9,634	17,573
Long-term debt	25,858	35,274
Other liabilities	4,887	4,861
Total liabilities held for sale	52,486	70,661

Fiber and Starch Business

On December 22, 2014, the Company completed the sale of theFiber Business for $37.5 million, subject to certain closing adjustments. The Fiber Business included five facilities located in Louisville, Kentucky, Cedar Rapids, Iowa, Cambridge, Minnesota, Fosston, Minnesota, and Galesburg, Illinois. The Fiber Business was formerly part of the former Value Added Ingredients operating segment. The Company continues to operate both its integrated grain- and fruit-based ingredient businesses, which were not part of the sale, and which previously formed the remainder of the former Value Added Ingredients operating segment.

For the year ended January 3, 2015, the Company recognized the following gain on sale of the Fiber Business in discontinued operations:

	$
Cash consideration	37,500
Transaction and related costs	(637)
Net proceeds	36,863
Current assets	12,139
Property, plant and equipment	13,045
Goodwill	12,030
Current liabilities	(3,239)
Net assets sold	33,975
Pre-tax gain on sale	2,888
Provision for income taxes	(990)
Gain on sale of discontinued operations, net of income taxes	1,898

Major Components of Operating Results Reported in Discontinued Operations

The following reconciles the major components of the results of discontinued operations to the amounts reported in the consolidated statements of operations:

		January 2, 2016	January 3, 2015	December 28, 2013
		$	$	$
Revenues		113,805	180,793	183,269
Cost of goods sold		(99,256)	(154,629)	(153,819)
Selling, general and administrative expenses		(11,170)	(19,108)	(20,577)
Intangible asset amortization		(1,987)	(2,236)	(2,551)
Goodwill impairment		-	(10,975)	(3,552)
Other expense, net(1)		(15,097)	(4,801)	(1,593)
Foreign exchange gain (loss)		717	(1,216)	1,183
Interest expense		(4,389)	(3,821)	(3,644)
Loss before income taxes		(17,377)	(15,993)	(1,284)
Loss on classification as held for sale before income taxes		(10,515)	-	-
Gain on sale before income taxes		-	2,888	-
Total pre-tax loss from discontinued operations		(27,892)	(13,105)	(1,284)
Recovery of (provision for) income taxes		(402)	2,000	853
Loss from discontinued operations		(28,294)	(11,105)	(431)
Loss from discontinued operations attributable to
	non-controlling interest	8,819	4,911	303
Loss from discontinued operations attributable to SunOpta Inc.		(19,475)	(6,194)	(128)

(1)For the years ended January 2, 2016, January 3, 2015 and December 28, 2013, includes charges related to the impairment of long-lived assets of Opta Minerals of $12.4 million, $3.8 million and $0.3 million, respectively.