Canadian organic food group SunOpta has said its US$450m acquisition of Sunrise Growers will strengthen its presence in the high-growth, private-label frozen fruit sector.
"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," president and COO Rik Jacobs said.
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"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."
Sunrise Growers was bought by an investor group led by affiliates of Paine & Partners in 2013. The company generates annualised revenues of approximately $300m and the purchase price values the group at 11.5 times EBITDA. SunOpta estimated it will generates "more than $10m" in run-rate cost synergies by 2017. The group said it will be accretive to adjusted earnings in 2016, adding $0.04 to EPS that year.
"We have a strong balance sheet that provides the financial flexibility to complete this strategic, accretive acquisition," said Steve Bromley, SunOpta's CEO. "Sunrise Growers has significant share in a strong and growing category which 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."
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Ed Haft, president and chief executive officer of Sunrise Growers, will lead SunOpta's frozen fruit operations after the transaction closes.
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By GlobalDataHaft saod: "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. 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."
