Shares in Darling International jumped to an all-time high after the waste-meat recycling group unveiled the Can$645m ($614m) purchase of a rival operation from Maple Leaf Foods - whose stock also soared.
Texas-based Darling International said it had created North America's "leading provider of independent rendering and recycling services" in buying Maple Leaf's Rothsay – the top operator in the sector in Canada.
Besides owning five rendering plants, Rothsay also operates a biodiesel plant in Quebec, mirroring Darling's own operations, which also extend into biofuels.
A major use of cooking oils that these recycling companies collect is as a feedstock for creating biodiesel.
Indeed, Darling International unveiled a biofuels joint venture, Diamond Green Diesel, with energy group Valero in 2010.
The deal will create opportunities to release deal benefits "in the form of transferring best practices and improved operational efficiencies" at Rothsay, Randall Stuewe, the Darling International chairman and chief executive, told investors.
In biofuels, Mr Stuewe said that the deal "may open up some opportunities as Valero has a large refinery up in Quebec", and may be able to open up fresh marketing routes.
At Maple Leaf Foods, the group behind Klik luncheon meat, Michael McCain, chief executive, said that the deal "supports our strategy to focus on effective capital deployment and profitable growth in the consumer packaged foods market".
"The sale will support future investments in our consumer facing businesses."
However, Maple Leaf said that the immediate target of the proceeds would be on reducing debt levels, which the group acknowledged have risen above targets.
Finance director Michael Vels last month, unveiling results for the April-to-June quarter, told investors that debts had risen to 3.7 times earnings before interest, taxation, depreciation and amortisation (ebitda), "higher than the management's target" of 3.0 times.
Upon completion of a Can$560m programme to upgrade its processed meat operations, and benefit from higher margins available in consumer products, the group said it "will consider appropriate deployment of excess capital, including reinvesting in its core consumer packaged food businesses or returning excess capital to shareholders".
The deal fostered a rebound in Maple Leaf Foods shares, which had as of Thursday's close fallen some 14% since the April-to-June results were released at the end of July, showing a fall to breakeven, from a profit of Can$26m a year before.
The decline reflected a Can$9.8m loss in meats and agribusiness, blamed on the poor margins in hog production.
Maple Leaf Foods shares stood up 9.0% at Can$14.59 in Toronto.
Shares in Darling International hit a record high of $22.13 in New York, before easing to $20.99, a gain of 8.6% on the day.