TORONTO — SunOpta Inc., the Toronto-based processor of organic and specialty foods, has signed a definitive agreement to acquire Sunrise Holdings, Inc., a supplier of private label frozen fruit, from an investor group led by affiliates of Paine & Partners L.L.C. in a transaction valued at approximately $450 million.
Headquartered in California, Sunrise Growers generates approximately $300 million in annualized revenues as a leading supplier of domestic and imported conventional and organic frozen fruit to retail and food service customers from its facilities in California, Kansas and Mexico.
SunOpta expects to realize more than $10 million in procurement, logistical and operating synergies by the end of 2017. The addition of Sunrise Growers is expected to be accretive to SunOpta’s earnings in fiscal 2016, excluding transaction and integration-related costs and certain one-time purchase accounting expenses. The company expects to complete the transaction in the fall of 2015, subject to regulatory approval and customary closing conditions.
|Rik Jacobs, president and c.o.o. of SunOpta.|
“The acquisition of Sunrise Growers is transformative for our company, as it significantly expands our scale in the private label frozen fruit category and aligns well with consumer demands for healthy, convenient and minimally processed foods,” said Rik Jacobs, president and chief operating officer of SunOpta. “Sunrise Growers is a high growth business that is expected to enhance product mix and thus our margin profile and accelerate our strategic focus on integrated consumer products.
“It also provides us with an immediate leadership position in frozen fruit that broadens and deepens our existing customer relationships and complements our leadership in the aseptic non-dairy category.”
Ed Haft, president and chief executive officer of Sunrise Growers, will lead SunOpta’s frozen fruit operations after the transaction closes.
“Our team of passionate and committed employees has built a leading private label frozen fruit supplier with a highly scaled operation and top market position,” Mr. Haft said. “We are excited to have our business be part of the global team at SunOpta and believe this will position us to serve more customers and expand our market reach. Frozen IQF fruits are harvested at their peak of freshness and nutrition and provide a great tasting, convenient and sustainable solution for consumers who want healthy foods.”
Earlier this year, SunOpta acquired Citrusource, L.L.C., a supplier of not-from-concentrate private label organic and conventional orange juice and citrus products, for a combination of cash on closing of $13.3 million, plus future payments based on specific performance targets.
Following the acquisition of Sunrise Growers, SunOpta said it expects to continue to have access to capital to support further acquisitions, driven by a strong balance sheet and expanded free cash flow from the combined businesses.“We have a strong balance sheet that provides the financial flexibility to complete this strategic, accretive acquisition,” said Steve Bromley, chief executive officer of SunOpta. “Sunrise Growers has significant share in a strong and growing category that is aligned with our core focus on healthy foods, and we expect to realize meaningful operational efficiencies and commercial synergies. We believe this transaction is transformative for SunOpta, should lead to significant value for our shareholders and offers immediate benefits for our customers.”