12:09 PM EDT, 07/09/2024 (MT Newswires) -- Maple Leaf Foods ( MLFNF ) was last seen up 5.5% after the company on Tuesday said it plans to spin out its pork-processing operations into a separate company.

Maple Leaf said details on the spin out and a name for the new company will be announced "in coming months" and complete in 2025. It expects to retain a 19.9% stake in the pork business.

"As separate companies, Maple Leaf Foods ( MLFNF ) and the new Pork Company will each have exciting prospects, a sharpened execution focus with its own dedicated management team, and the financial independence to pursue its own value creation strategy, all with an uncompromising commitment to safety and sustainability," chief executive Curtis Frank said in a release.

Curtis will remain chief executive of Maple Leaf Foods ( MLFNF ) following the split, while Dennis Organ, who joined the company in 2023 as president of its pork complex will become chief executive of the spin out.

Using financial results for the 12 months ending on March 31, Maple Leaf said it expects the pork spin out would have an EBITDA of $70 million, "or approximately $180 million when adjusted for normal market conditions". Maple Leaf, separate from its pork operations, would have posted EBITDA of $395 million. It noted its estimates were preliminary and subject to change.

The company said shareholders will receive a stake in the new company as a dividend. Shareholders will need to vote to approve the split.

Maple Leaf shares were last seen up $1.24 to $23.69 on the Toronto Stock Exchange.

Price: 23.69, Change: +1.24, Percent Change: +5.52