Avocado products processorCalavo Growers, Inc. , Santa Paula, Calif., said it agreed to buyRenaissance Food Group (RFG), LLC, a Rancho Cordova, Calif., processor of retail fresh-cut fruit and vegetables. Officials said the expect to close the deal on June 1, 2011, with an exchange of cash and stock, including earn-out payments based on financial performance. Other financial terms were not disclosed.
Calavo said RFG offers a variety of retail product lines for produce, deli,
meat and foodservice departments. Produce lines include fresh-cut
fruit, ready-to-eat vegetables and Chef Essentials® recipe-ready
vegetables, such as Asparagus Sauté and Savory Butternut Squash. Deli
lines include ready-to-eat “grab-n-go” salads, healthy fresh snacks,
deli-style sandwiches, wraps and fresh party trays.
RFG started in 2003 and experienced 54 percent compound annual growth in sales from inception to 2010, officials said. RFG's current-year revenues are projected to exceed $100 million.
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 refrigerated all-natural guacamole, the Salsa Lisa line of premium fresh salsas, guacamole hummus and premium tortilla chips.
“Our acquisition of Renaissance Food Group and its outstanding Garden Highway brand represents a transformational step forward for Calavo," said Lee E. Cole, Calavo chairman, president and CEO. "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 Highway's line, as well as numerous further expansion opportunities as Calavo continues to evolve in coming years.”
Cole added, "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.”
RFG was founded by Jim Catchot, Ken Catchot and Jim Gibson.
Deal expands Calavo's fresh reach
May 31, 2011