John B. Sanfilippo to buy assets of nut, fruit company

by Jeff Gelski
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ELGIN, ILL. – John B. Sanfilippo & Son, Inc. has entered into an agreement to acquire certain assets and assume certain liabilities of Orchard Valley Harvest, Inc., based in Modesto, Calif, and a supplier of branded and private label nut and dried fruit products. The agreement has John B. Sanfilippo & Son paying $29.5 million in cash plus additional future consideration of up to $10.5 million, which is contingent upon Orchard Valley Harvest’s performance for the 2010 and 2011 calendar years.

John B. Sanfilippo & Son expects the acquisition to add about $50 million to $60 million in incremental net sales on an annual basis. Orchard Valley Harvest, based on its financial statements for the 2008 and 2009 calendar years, would have added about 30c to 40c per share to the earnings per share of John B. Sanfilippo & Son during those two years.

John B. Sanfilippo & Son will use excess availability in its bank credit facility to fund the acquisition, which is expected to close before the end of John B. Sanfilippo & Son’s fiscal year ending June 24.

“The acquisition of O.V.H. fulfills a key pillar in J.B.S.S.’ five-year strategic plan by significantly increasing our presence in the produce section of food retailers,” said Jeffrey T. Sanfilippo, chairman and chief executive officer of J.B.S.S. “The perimeter of the store is where retailers have been increasingly focusing their time and investment and where consumers have more frequently been purchasing fruit and nut products.”

Steve Kerr, president of Orchard Valley Harvest, added, “We are excited about the opportunity to leverage J.B.S.S.’ scale and position as the leading singularly focused provider of fruit and nut-related solutions to expand O.V.H.’s market reach in produce sections throughout the United States.”
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