United Natural Foods

(UNFI) - Get Report

agreed to acquire Roots & Fruits Cooperative and reaffirmed financial guidance for fiscal 2006.

Dayville, Conn.-based United Natural said it expects to make $1.14 to $1.19 a share for the year ending July 31, 2006, up 15%-20% over expected 2005 levels. The company said those figures exclude "potential special items and the expensing of options." United Natural expects revenue to rise 10%-15% to around $2.3 billion. Those figures are in line with the Wall Street analyst consensus estimates.

United Natural also said it would buy Roots & Fruits, a Minnesota-based organic wholesale distributor of fresh produce and other quality perishables. Terms weren't disclosed, but United Natural said Roots & Fruits opened in 1978 and has annualized revenue of about $20 million. It distributes to some 500 customers in the upper Midwest.

"We are extremely pleased that Roots & Fruits has chosen to join United Natural Foods," CEO Steve Townsend said. "We will look to bring new products and services to their well-established customer base. With the addition of Roots & Fruits, United Natural Foods will strengthen our position in the Midwest, which will provide opportunities for improving operating efficiencies and additional economies of scale."

United Natural Foods expects that the acquisition will be slightly dilutive to earnings for the fourth quarter, neutral to accretive for fiscal 2006 and accretive thereafter.

On Wednesday, United Natural slipped 31 cents to $31.33.