Irish fresh produce giant Fyffes has announced the purchase of Highline Produce Limited, Canada's largest mushroom business, for C$145m (€98m).
According to Fyffes, it has acquired 100 per cent of the equity in Highline and is refinancing its existing debt, with the acquisition funded through new and existing bank debt.
“Highline is a very fine business with a strong position in an important product category," noted Fyffes chairman David McCann. "We look forward to working with Glenn Martin and his management team to continue to develop the business.
"This transaction fits perfectly with Fyffes strategic objective of adding an additional product to its existing three through the acquisition of an established, successful, integrated operator in a category with significant scale," he added.
Highline CEO Glenn Martin added: “We are excited about this transaction and delighted to be joining Fyffes, given its long history and successful track record of growth. We look forward to working with Fyffes management as we continue to grow our own business into the future.”
Highline is a fully integrated mushroom business operating from five facilities, of which four are owned and one is leased. It is
the largest operator in the mushroom category in Canada, with retail customers accounting for around 75 per cent of sales, and
wholesale, food service and canning customers accounting for the balance. US customers represent some 35 per cent of current annual revenues.
The groups confirmed that Highline’s management team, led by Martin, would continue to run the business.
The news comes on the same day that Fyffes confirmed its financial results for the full-year of 2015, originally announced at the end of February.
Total revenue, including the group's share of joint ventures, came to €1.22bn, while adjusted EBITA climbed 14.2 per cent to €45.8m.
"Looking ahead to 2016, having achieved a further step up in profitability in 2015, Fyffes is focused on consolidating at this higher level of earnings," said McCann. "The Group’s initial target EBITA for 2016 is in the range €42-€48 million, compared to €45.8 million in 2015.
"Fyffes is pursuing increases in selling prices in all markets in response to the continuing strength of the US Dollar against the euro and Sterling," he continued. "Trading conditions have been satisfactory in the year to date in 2016.
The Group remains focused on always improving the efficiency of its operations in order to enhance its competitiveness. Fyffes is determined to continue to grow its business and is actively pursuing a number of attractive acquisition opportunities at all
points in the supply chain from production to distribution," McCann added.