SunOpta has divested a portion of its frozen fruit assets to Nature’s Touch, a Canada-based specialist in the food and beverage industry trends.
The deal, valued at $141m, encompasses the sale of select assets from SunOpta’s Sunrise Growers business located in Edwardsville, Kansas, and Jacona, Mexico.
Nature’s Touch sees the United States as a significant growth opportunity and has recently invested in a facility in Virginia.
In 2015, SunOpta acquired Sunrise Growers for approximately $450m. This sale of assets is part of SunOpta’s strategic shift towards focusing on value-add plant-based products and healthy snacks.
Nature’s Touch CEO John Tentomas stated, “This acquisition is more than just a business transaction – it marks a deliberate step towards a future that is more integrated, innovative, and impactful. With this acquisition, we will provide North American consumers with the most expansive network of freezing and distribution on the continent.”
In April, SunOpta outlined its long-term goal to double revenue, with a focus on plant-based beverages.
Recently, the company revised down its sales forecast for the year due to frozen fruit customer losses, slower new business ramp-up, and category softness.
SunOpta reported lower volumes of frozen fruit attributed to decreased retail consumption, constraints on certain fruit varieties affecting blends, and lost foodservice volumes.
Joe Ennen, SunOpta’s CEO, described the deal with Nature’s Touch as “a major milestone in our portfolio optimization efforts.” He emphasized that the company is focused on becoming a leading manufacturer of value-added products in the plant-based and healthy snack categories, resulting in a more capital-efficient business model and stronger balance sheet.
Ennen added, “This transaction is significantly enhancing our margins and ensuring we are singularly focused on the most attractive growth opportunities.”
In the same announcement, SunOpta provided preliminary third-quarter results, reporting an expected 6% increase in total revenue from continuing operations to around $152m. Adjusted EBITDA from continuing operations for the third quarter of 2023 is projected to be approximately $18.5-19m.
Mizuho Securities USA managing director John Baumgartner noted that the frozen-fruit assets were sold at a “very solid valuation” of 0.5 times the last 12 months’ sales and 9.4 times the EBITDA.
