SunOpta Inc. (STKL,SOY.TO), a plant and fruit-based food and beverages producer, announced Friday its preliminary third-quarter results, expecting higher revenues. The company also maintained its fiscal 2023 outlook.
Further, the company announced the sale of certain frozen fruit assets to Quebec, Canada-based Nature’s Touch for $141 million, as well as the appointment of Greg Gaba as Chief Financial Officer, effective October 13. Gaba, who has been with the Company for over six years, most recently served as Deputy CFO.
He succeeds Scott Huckins, who resigns as CFO and General Manager of Fruit-Based Foods and Beverages to pursue another opportunity at a publicly traded company.
Regarding its trading, the company said it expects total revenue from continuing operations to be around $152 million, an increase of around 6 percent from last year. Adjusted EBITDA from continuing operations is expected to be around $18.5 million to $19 million.
SunOpta added that its sale of frozen fruit assets included the primary assets of the frozen fruit business, including facilities located in Edwardsville, Kansas and Jacona, Mexico, along with a significant quantity of frozen fruit inventory.
The deal, which represents the Company’s exit from the frozen fruit business, was closed on October 12. The transaction is significantly accretive to margins, the firm said.
The transaction price includes $20 million of seller promissory notes due in three years. The standalone frozen fruit business generated approximately $263 million of revenue and approximately $15 million of adjusted EBITDA over the twelve-month period ended July 1.
The company expects to use the net cash proceeds to pay down debt and other liabilities.
Joe Ennen, Chief Executive Officer of SunOpta, said, “The divestiture of our frozen fruit business is a major milestone in our portfolio optimization efforts and our multi-year transformation to becoming a leading manufacturer of value-add products in plant-based and healthy snack categories.”
In the transaction, Evercore served as financial advisor to SunOpta. Ernst & Young Orenda Corporate Finance Inc. in Canada served as financial advisor to Nature’s Touch.
In pre-market activity on the NYSE, SunOpta shares were trading at $532.00, up 1.23 percent.
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