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Idaho Pacific Holding sold by Otter Tail Corporation

May 9, 2011
On May 6, 2011 Otter Tail Corporation completed the sale of Idaho Pacific Holding to affiliates of Novacap Industries III, L.P., for approximately $87.0 million in cash.

The sale of IPH allows the Otter Tail Corporation to refine its portfolio to focus on a mix of businesses that will reduce its risk profile. The proceeds from the sale of IPH will be used to pay down short-term borrowings on the corporation's credit facility for its nonelectric businesses.

John Erickson, president and chief executive officer of Otter Tail Corporation on the sale of Idaho Pacific Holding: "We are pleased to have completed the sale of Idaho Pacific Holdings and expect to recognize a significant gain on the transaction. This sale provides us the opportunity to use the proceeds to further improve our financial position, as well as refine our portfolio of businesses in a fashion that reduces our risk profile and best supports our long-term diversification strategy."

The financial results for Q1 2011 of Otter Tail Corporation's Food Ingredient Processing segment (Idaho Pacific Holding) were as follows:

Food ingredient processing net income was $1.8 million compared with $1.4 million for the first quarter of 2010. The $0.4 million increase in net income was driven by a $1.7 million increase in revenue resulting from a 7.5% increase in pounds of product sold. Cost of goods sold increased $1.1 million due to the increase in sales volume while the cost per pound of product sold only increased 0.3%.
Companies in this Article
Idaho Pacific is a manufacturer of Dehydrated potato flour, potato flakes and potato granules. Idaho Pacific acquired AgraWest Foods in 2000 and a potato flakes producing facility in Center, Colorado in 2002.