Calavo Growers, Inc. (Nasdaq–GS: CVGW) today announced that it has signed an agreement for the acquisition of Renaissance Food Group (RFG), LLC, a closely held fresh-food company that produces, markets and distributes nationally a portfolio of healthy, high quality lifestyle products for consumers via the retail channel. The transaction, which is expected to close on June 1, 2011, is for a combination of cash and stock, including earn-out payments based on financial performance. Terms were not further disclosed.
The newly acquired company started in 2003 and experienced 54 percent compound annual growth in sales from inception to 2010. Current-year revenues are projected to exceed $100 million.
Headquartered in Rancho Cordova, Calif., RFG operates six processing facilities nationally, of which those in Sacramento, Calif. and Houston, Texas are company owned. It has 400 employees and serves major retailers throughout the United States. RFG will operate as a wholly owned subsidiary of the Calavo Foods business unit, whose current products include Calavo’s all-natural guacamole, the Salsa Lisa line of premium fresh salsas, guacamole hummus and premium tortilla chips.
Lee E. Cole, Calavo’s Chairman, President and Chief Executive Officer, commented: “Our acquisition of Renaissance Food Group and its outstanding Garden Highway brand represents a transformational step forward for Calavo. RFG will be a key growth driver of our company’s expansion in the fresh refrigerated packaged goods category in both the retail produce and deli departments.”
He added that Garden Highway’s national processing and fast-to-the-market infrastructure provides an “ideal platform for accelerated growth in Calavo’s current product lines, continued product development in the Garden Highways line, as well as numerous further expansion opportunities as Calavo continues to evolve in coming years.”
Cole emphasized that “Calavo invested a considerable amount of time and energy over the years identifying the right sizable transaction. I believe we found the perfect company that is ideally positioned in a significant growth category, comes with a strong brand and allows us to effectively leverage our blue-chip customer base by selling more products to them. Importantly, RFG’s management is extremely professional and talented. The transaction will be immediately accretive to earnings, as Calavo’s management continues to act in the best interest of its shareholders.”