Sale of Soy and Corn Business

3 Months Ended

Mar. 30, 2019

Sale Of Soy And Corn Business [Abstract]

Sale of Soy and Corn Business [Text Block]

3.  Sale of Soy and Corn Business

On February 22, 2019, the Company's subsidiary, SunOpta Grains and Foods Inc., completed the sale of its specialty and organic soy and corn business to Pipeline Foods, LLC ("Pipeline Foods") for $66.5 million, which is subject to certain post-closing adjustments including the finalization of the closing working capital balance.  The soy and corn business engaged in seed and grain conditioning and corn milling and formed part of the Company's Global Ingredients reportable segment.  The business included five facilities located in Hope, Minnesota, Blooming Prairie, Minnesota, Ellendale, Minnesota, Moorhead, Minnesota, and Cresco, Iowa.  The net proceeds from this transaction were initially used to repay borrowings under the Company's Global Credit Facility (see note 8).

Pending finalization of the post-closing adjustments, the Company recognized the following gain on sale of the soy and corn business, which was recorded in other income for the quarter ended March 30, 2019:

	$
Cash consideration	66,500
Transaction and related costs	(1,624	)
Net proceeds	64,876
Current assets	22,810
Property, plant and equipment	8,423
Goodwill	1,526
Current liabilities	(13,462	)
Net assets sold	19,297
Pre-tax gain on sale	45,579

As the soy and corn business did not qualify for presentation as discontinued operations, operating results for this business prior to February 22, 2019 were reported in continuing operations on the consolidated statements of operations for the current and comparative periods.  For the quarters ended March 30, 2019 and March 31, 2018, the soy and corn business generated revenues of $10.3 million and $21.4 million, respectively.  The soy and corn business reported a loss before income taxes of $0.2 million for the quarter ended March 30, 2019, and earnings before income taxes of $2.3 million for the quarter ended March 31, 2018.  These pre-tax results exclude management fees charged by Corporate Services and do not reflect other cost reduction measures associated with the sale of the soy and corn business that were taken in connection with the Value Creation Plan (see note 4).