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US fresh produce supplier Calavo Growers has announced it is to acquire fellow California-based business Simply Fresh Fruit for an undisclosed sum.

Calavo, best-known for its production of avocados, said the deal is being done through its Renaissance Food Group (RFG) subsidiary.

Founded in 1999, privately held SFFI – which trades as Simply Fresh Fruit – is a processor and supplier of a broad range of fresh-cut fruit. Principally serving the foodservice and hospitality markets, it generated more than US$30m in sales in its most recent fiscal year. 

Calavo said focus in those channels is anticipated to be “highly complementary to the retail-grocery expertise of Calavo’s RFG business segment”.

It said it expects the deal to be accretive to its fiscal 2020 operating results.

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Lee Cole, Calavo’s CEO, said: “The purchase of Simply Fresh Fruit and its combination into the larger RFG platform makes sense on every level. SFFI has built an impressive business, both operationally and financially. It enables Calavo to efficiently add volume on favourable terms across existing RFG production facilities. 

“With its concentration in the foodservice and hospitality industries, SFFI provides us with a profitable, ‘pure-play’ vehicle for accelerating the company’s growth in these additional categories, and expands RFG’s total potential addressable market for its core fresh-cut fruit business.”

Calavo’s RFG segment creates, markets and distributes a portfolio of fresh foods, including fresh-cut fruit, fresh-cut vegetables and prepared items.