Mission Produce has finalized an agreement to acquire fellow avocado supplier Calavo Growers in a deal valued at approximately $430 million. This announcement follows seven months after Calavo disclosed that it had received a takeover approach from an undisclosed party.
With this acquisition, Mission Produce, which is also based in California, anticipates that its shareholders will hold over 80% of the combined entity upon completion of the deal. Investors from Calavo will retain the remaining stakes.
“This acquisition marks an important milestone for Mission and for our industry,” stated Mission Produce co-founder and CEO, Steve Barnard. He emphasized that the impending transaction is set to enhance the company’s scale and diversify its business model and product offerings. This, in turn, will allow Mission Produce to provide greater value for customers, growers, employees, and shareholders alike.
Founded in 1983, Mission Produce has built its reputation primarily on avocados while also offering mangoes and blueberries. Calavo, with a history exceeding 100 years, has similarly established itself in the avocado sector, sourcing its products from California, Mexico, Peru, and Colombia. Beyond avocados, the company’s portfolio includes tomatoes, papayas, and various ready-to-eat items like guacamole and salsas, marketed under the Calavo brand and through private-label contracts.
The acquisition is poised to double Mission Produce’s packhouses in Mexico from two to four, which will facilitate a more stable year-round supply of avocados. A wider product range is expected to enhance productivity and address the seasonal fluctuations in avocado availability.
John Lindeman, Calavo’s president and CEO, stated, “We believe combining with Mission represents a compelling next chapter that will enable our combined business to unlock new growth and expand the impact of our trusted Calavo brand, while also providing our shareholders with compelling value and the opportunity to participate as a shareholder of a global leader in a growing sector.”
Recently appointed CEO John Pawlowski is anticipated to take the helm of the consolidated company following Mission Produce’s AGM in April, with Steve Barnard transitioning to the role of executive chairman.
The transaction terms outline that Calavo shareholders will receive $27 per share, which includes $14.85 in cash and 0.9790 Mission shares for each Calavo share. Both companies’ boards have approved the arrangement, aiming to complete the transaction by the end of August.
This acquisition underscores significant movements in the food and beverage industry trends, reflecting the evolving landscape of the food and drink business. Furthermore, it highlights how strategic partnerships can help companies navigate food and drink consumer trends, fortifying their market presence.