SunOpta has sold off a batch of frozen fruit assets to Canada-based Nature’s Touch, a specialist in the field.
In a deal worth $141m, Nature’s Touch has bought “certain assets” of SunOpta’s Sunrise Growers business. The transaction centred on operations located in Edwardsville, Kansas and in Jacona, Mexico.
Nature’s Touch described the US as “a significant growth opportunity”. It has recently invested in another facility in Virginia.
SunOpta acquired Sunrise Growers in 2015 for around $450m. The sale of the assets is part of efforts to focused on “value-add” plant-based products and healthy snacks.
Nature’s Touch CEO John Tentomas said: “This acquisition is more than just a business transaction – it marks a deliberate step towards a future that is more integrated, innovative, and impactful.
“This acquisition puts us in the unique position of providing North American consumers with the most expansive network of freezing and distribution on the continent.”
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In April, SunOpta laid out a long-term target to double revenue, with plant-based beverages at the heart of its ambitions.
Two months ago, the company reduced its sales outlook for the year after a disappointing second quarter, noting frozen fruit customer losses, a slower ramp-up of new business and category softness.
The group reported lower volumes of frozen fruit due to decreased retail consumption trends, constraints on certain fruit varieties impacting blends and lost foodservice volumes.
Joe Ennen, SunOpta’s CEO, said the deal with Nature’s Touch was “a major milestone in our portfolio optimisation efforts”. The company, he explained, is on “a multi-year transformation to becoming a leading manufacturer of value-add products in plant-based and healthy snack categories”.
Ennen added: “This transaction is significantly accretive to margins, results in a more capital-efficient business model, strengthens our balance sheet and ensures we are singularly focused on the most attractive growth opportunities.”
Alongside the news of the deal, SunOpta issued preliminary third-quarter results. The company said total revenue from continuing operations was expected to be around 6% higher at approximately $152m. Adjusted EBITDA from continuing operations for the third quarter of 2023 is expected to be approximately $18.5-19m.
In a note to clients, Mizuho Securities USA managing director John Baumgartner said the frozen-fruit assets had been sold for a “very solid valuation” of 0.5 times the last 12 months’ of sales and 9.4 times the EBITDA.