Avocado company Calavo Growers and Limoneira have announced the formation of an alliance.

The deal involves equity cross-investments in each other's operations, creating a far-reaching agribusiness alliance that brings together the leading packer and marketer of avocados with one of its industry's largest growers, Calavo said in a press release.  The transaction involves an exchange of cash, stock and other considerations, but terms were not further disclosed.

Under the agreement, Calavo acquires approximately 15% ownership interest in Limoneira, and becomes the company's single-largest shareholder. Limoneira's land holdings include 7,000 prime California agriculture acres, principally located in Ventura Country, that also afford promising real-estate development opportunities. Limoneira, a 112-year-old international land, farming and food company becomes Calavo's second-largest shareholder through its newly obtained approximately 7% equity stake.

The synergies of the alliance become immediately evident, Calavo said. Most significantly, Calavo now packs, markets and distributes an estimated seven to 10 million pounds annually of avocados grown by Limoneira, which also produces lemons, oranges and other specialty crops.

Calavo distributes the fresh avocado crops of the world's two largest growers: Limoneira and the Irvine Company. Additionally, Calavo recently relocated its corporate headquarters from Santa Ana, California, to leased office space on the Limoneira Company ranch in Santa Paula.

Calavo chairman, president and chief executive officer Lee E. Cole and Harold S. Edwards, Limoneira's president and CEO, jointly disclosed that among possible future initiatives is the construction of a new state-of-the art avocado packinghouse that would be constructed on Limoneira land. The CEOs left open the possibility that the companies might prospectively collaborate on additional programs in the future, but said presently there are no specific projects in mind.

"This transaction is highly significant to Calavo and its shareholders," said Cole. "Through its investment in Limoneira, our company strengthens its business operations through substantial incremental avocado-packing volume and gives Calavo shareholders a stake in one of the country's most diversified agribusiness and land companies. Limoneira's 7,000 acres of land provide Calavo the opportunity to benefit from future commercial, residential and recreational real-estate development, creating additional value for our shareholders."

"For Limoneira, the relationship means becoming a substantial owner of the world's leading avocado company and one of the most respected brand names in all of agribusiness," said Edwards. "It also enables us to utilize available company office space and creates the prospect of future projects, such as the new packing facility. We are extremely pleased to become significant investors in Calavo, and are impressed with its operating strength, commanding market position and seasoned senior management team."