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Gay Lea Foods sells Thornloe Cheese to Triple “A” Cheese in acquisition deal

Gay Lea Foods has agreed to sell Thornloe Cheese to Mississauga-based Triple “A” Cheese.

The company says it has entered into a letter of intent to sell the cheese company in Thornloe, Ont.

All of Thornloe Cheese’s assets, including the plant, brand, cheese recipes, and plant supply quota, would be acquired by Triple “A” Cheese under the proposed conditions of sale.

“We are pleased to have found a buyer with an innovative vision for Thornloe Cheese,” says Suzanna Dalrymple, president and CEO of Gay Lea Foods. “The current Thornloe Cheese plant requires significant investment and is no longer financially viable. We believe a different concept and a new facility are needed for the brand to thrive in Northern Ontario and we’re hopeful the considerable effort invested in this project — by both organizations — will deliver that outcome.”

Terms of the deal

Despite the fact that this is a private sale with no disclosure of financial information, the groups have reached an agreement that gives the buyer a significant advantage and delayed payment terms.

During negotiations, it became clear that improvements would cost at least $10 million, given the plant’s age, state, and risk to food safety. The plant wasn’t considered financially stable enough; Thornloe Cheese opened in 1940 and opened the current plant in 1969.

In March of last year, Gay Lea revealed that it was in talks to sell Thornloe (opens in a new tab). The company stated that they had agreed “to a significantly advantaged sale price for the buyer, as well as deferred payment terms,” even though no financial information was disclosed on Wednesday.

“All of us at Triple “A” Cheese are excited by the prospect of turning this beloved, local brand into a destination that serves the community and attracts tourism to Northern Ontario,” says Stefano Camaiani, president and CEO at Triple “A” Cheese. “We must caution, however, that this is an ambitious project and there are no shortcuts. A new facility is needed and comes with significant funding requirements. There remains much work to be done.”

Plans for the future

The proposed Thornloe Cheese project is anticipated to have an expanded cheese production plant with an increased capacity to receive milk, situated on a more appropriate local land and equipped with a municipal water supply and wastewater treatment system.

At a new site next to the existing plant, Triple “A” Cheese expects the new concept to be a tourist and local destination, complete with a deli restaurant, coffee shop, party rooms, a lively patio and outdoor space, and a fresh grocery store.

Although a number of locations in Timiskaming Shores and New Liskeard are being considered by Triple “A” Cheese, the new Thornloe Cheese facility’s final location is yet unknown.

All terms of the transaction are subject to Triple “A” Cheese securing funding to construct a new dairy facility close to the existing Thornloe Cheese site.

Since the facility stopped producing cheese in October 2023, Gay Lea Foods will continue to skim grass-fed milk at Thornloe Cheese until October 2024.  Currently, the skim milk from this premium milk is utilized to make regular milk supply, while the milk from the grass-fed cow is used to make butter.

Thornloe Cheese will no longer supply Gay Lea Foods with grass-fed milk starting in October, but the company will still pay farmers the premium for grass-fed milk through March 31, 2025.

The firms anticipate the deal closing in 2025 and the new factory opening in 2027 or 2028, assuming financing efforts are successful.

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