SunOpta to Sell Fiber and Starch Business to JRS for $37.5 Million
16 Dec 2014 --- SunOpta Inc., a leading global company focused on natural and organic foods, announced it has signed a definitive agreement to sell its fiber and starch business to J. Rettenmaier & Sohne Group for $37.5 million, subject to certain post-closing adjustments.
"The sale of our fiber and starch business aligns with our stated strategies and enhances our focus on the faster growing areas of our business that fit our vertically integrated business model, leveraging our global sourcing and supply capabilities. Our unique global sourcing capabilities and our vertically integrated, or two-touch product strategy, is designed to deliver a higher value add to our customers, and lead to improved margins," said Steve Bromley, Chief Executive Officer at SunOpta. "While the fiber and starch business offered limited synergies with our core business, we believe that JRS is well positioned when it comes to fiber and customized ingredients and will be able to scale the business, which should serve the industry well and be positive for our transitioning employees."
"With this acquisition in the field of our core business we further strengthen our position in the natural fiber market by adding new products as well as a product development pipeline to our portfolio. We expect synergies and productivity gains not only in production but in most other areas. All this should result in an even better service to our customers," said Josef Otto Rettenmaier, Chief Executive Officer at JRS.
SunOpta's fiber and starch business includes five facilities located in Louisville, KY, Cedar Rapids, IA, Cambridge, MN, Fosston, MN, Galesburg, IL, all of which will now be part of the JRS portfolio of food operations. The fiber and starch business accounted for approximately 4 percent of SunOpta Foods' total revenues in fiscal 2013 and during the first three quarters of 2014. SunOpta will continue to operate both its integrated grain and fruit based ingredient platforms which were not part of the sale and currently form the remainder of the Value-Added Ingredient segment.
SunOpta will use the proceeds from the sale to make strategic investments that enhance its core vertically intregrated product portfolio and provide greater growth and margin opportunities, such as its recently announced $25 million aseptic facility expansion in Allentown, PA, and also for general corporate purposes.
"I want to thank all of our employees who are transitioning to JRS for their hard work and dedication," Bromley said. "Each employee has contributed to our goal of bringing well-being to life in their own way and has had a meaningful impact on SunOpta's growth."
Completion of the sale is subject to certain conditions and pre-closing matters and is expected to close in the next 30 days.
