Beef Improvement Ontario sells lab

Wednesday, March 2, 2011

by BETTER FARMING STAFF

Guelph-based Beef Improvement Ontario has sold Agri-Food Laboratories. The price is not being disclosed and the buyer is not being revealed at this time, pending clearance from lawyers.

BIO general manager Mike McMorris says the soil-testing lab, purchased from private owner Dale Cowan in 2006, has been a revenue generator for the producer-owned and governed genetic evaluation organization. Hanging onto the laboratory was not an option, he says, in the face of a well-financed competitor determined to enter the Ontario market. Updating equipment to compete would drain resources from BIO’s core businesses.

The value of the laboratory is at an all-time high, says a document distributed at the BIO annual meeting last week. McMorris says BIO’s revenue will be reduced but the organization will get by. The buyer approached BIO in February of 2010. A committee of directors, the general manager and a consultant considered the offer and other options.

According to the document, “The return on investment has been tremendous. The sale will yield a return on investment of approximately 70 per cent per year.”

BIO revenue last year exceeded $4 million and profit was $330,000 after “significant development in bioTrack development, according to BIO’s financial report.

BIO manages pedigrees on cattle, performance and management records for breeders and evaluates bulls, and beef cattle genetics in general. BF