Universal Corporation has agreed to acquire FruitSmart, a fruit and vegetable ingredient processor and supplier, with the aim of providing growth opportunity in an adjacent industry.
Founded in 1982, FruitSmart supplies a variety of fruit and vegetable products to food, beverage and flavour companies throughout the US and internationally, including juices, concentrates, blends, and purees.
With headquarters in Virginia, Universal Corporation will acquire FruitSmart’s two manufacturing facilities, and believes its purchase will benefit due to the ‘growing consumer interest in better-for-you premium ingredients.’
Chairman, president and CEO of Universal Corporation, George Freeman, said: “Given the worldwide addressable market opportunity for fruit and vegetable sourcing and processing, and the similar supplier dynamics and scale benefits to our existing business, this transaction represents a foundational step in building out a broader agri-products services platform and has the potential to be a new source of growth to drive future value creation for our shareholders.”
Following the transaction closure, Terry Chambers, president of FruitSmart, will continue to lead the FruitSmart business.
“By joining Universal Corporation, FruitSmart and our employees will benefit from Universal’s global agri-products services and supply chain management expertise, as well as the greater resources and enhanced scale of a larger, public company,” said Chambers.
Chambers added: “Importantly, we will maintain our continued commitment to outstanding product quality and our strong relationships with our growers and our customers.”
The deal is expected to close in the current fiscal year, subject to customary closing conditions. Universal Corporation says the acquisition will be accretive to earnings the first fiscal year following closing.
The agri-products supplier believes businesses in adjacent industries could represent at least 10 to 20 percent of its earnings in the next five years.
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