Leading avocado business is evaluating potential sale to F&S Fresh Foods
Calavo Growers has announced it is exploring the sale of its fresh cut business – formerly known as Renaissance Food Group (RFG) – to F&S Fresh Foods.
Lee E Cole, president and chief executive officer of the leading avocado business said a non-binding letter of intent had been signed.
“Since I returned to Calavo as chief executive in March, we have renewed our focus on our core avocado and guacamole businesses to maximise profitability, and I am pleased with the progress we have made,” said Cole.
“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. 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.”
Some of the details of the potential sale include a total transaction value of approximately US$100m, subject to customary adjustments and a significant reduction to Calavo’s post-transaction operating expenses.
If agreed upon, the transaction is anticipated to be closed in the second fiscal quarter of 2024 and Calavo expects to use the proceeds for debt reduction, growing the company’s core business and returning cash to shareholders.