SANTA PAULA, CA - With eyes on maximizing its cornerstone categories, Calavo Growers announced it is exploring the sale of its Fresh Cut Business (formerly known as RFG), naming the potential new parent of the division as F&S Fresh Foods.
“Since I returned to Calavo as CEO in March, we have renewed our focus on our core avocado and guacamole businesses to maximize profitability, and I am pleased with the progress we have made. To dedicate more focus to our core and to maximize shareholder value, we have been exploring strategic alternatives for our Fresh Cut business, previously known as RFG,” commented Lee E. Cole, President and Chief Executive Officer. “I am pleased to share that we have signed a non-binding letter of intent to evaluate a sale of our Fresh Cut business and some related real estate with F&S Fresh Foods, a leader in the industry and one of our long-trusted co-packing partners.”
According to a press release from the company, the total transaction value (subject to customary adjustments) is approximately $100 million, with a significant reduction to Calavo’s post-transaction SG&A (selling, general, and administrative expenses).
The company expects proceeds to include:
- Debt reduction
- Growing Calavo’s core business
- Returning cash to shareholders
Should the deal go through, closing is anticipated in the second fiscal quarter of 2024, but the company emphasized there is no assurance that a definitive agreement will result from the discussions with F&S Fresh Foods and that terms are still subject to negotiation.
AndNowUKnow will be sure to report any developments that become available.
