SunOpta has divested a collection of frozen fruit assets to Nature’s Touch, a Canada-based specialist in the industry.
In a $141 million agreement, Nature’s Touch has acquired specific assets of SunOpta’s Sunrise Growers business, with a focus on operations situated in Edwardsville, Kansas, and Jacona, Mexico.
Nature’s Touch identified the US market as a “significant growth prospect” and has recently made an investment in an additional facility located in Virginia.
SunOpta purchased Sunrise Growers in 2015 for approximately $450 million. The sale of these assets is part of the company’s strategy to prioritize “value-added” plant-based products and wholesome 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.”
In April, SunOpta unveiled a long-term goal to double its revenue, with a primary focus on plant-based beverages to drive its aspirations.
The company lowered its sales forecast for the year two months ago due to a disappointing second quarter. They cited factors such as customer attrition in the frozen fruit segment, a slower expansion of new business, and a weak performance in the category.
The group noted reduced volumes of frozen fruit attributed to declining retail consumption patterns, constraints on specific fruit varieties affecting blends, and the loss of 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.”
In conjunction with the deal announcement, SunOpta released preliminary third-quarter results. The company anticipated that total revenue from continuing operations would increase by approximately 6%, reaching around $152 million. Adjusted EBITDA from continuing operations for the third quarter of 2023 is projected to range between approximately $18.5 million to $19 million.
In a communication to clients, John Baumgartner, the Managing Director of Mizuho Securities USA, described the sale of frozen fruit assets as having achieved a “strong valuation,” with a multiple of 0.5 times the last 12 months’ sales and 9.4 times the EBITDA.
