SunOpta to buy private frozen fruit supplier for about $450 million
By Anet Josline Pinto
(Reuters) - Canadian organic foods supplier SunOpta Inc (SOY.TO: Quote) (STKL.O: Quote) said it would buy organic frozen fruit supplier Sunrise Holdings Delaware Inc for about $450 million in a move to strengthen its packaged products business.
SunOpta, which also sells agricultural produce and food ingredients, said it was buying Sunrise from a group of investors led by private equity firm Paine & Partners LLC.
Demand for organic food, from fruits to meat, has risen steadily in the last decade as consumers become more concerned about genetically modified crops and chemicals used in the food chain.
"From a strategy perspective, I think (the deal) is a solid move," said D A Davidson & Co analyst Eric Gottlieb.
The deal will help SunOpta become the U.S. leader in the "individually quick-frozen organic food" business, Gottlieb told Reuters.
Individually quick-frozen foods do not stick together as a block, making foods such as strawberries and blueberries easier to use.
"It is a niche area that is growing at a very high rate," Gottlieb said.
Consumer packaged products will now account for more than half of SunOpta's business, the company said. The unit contributed 38 percent to SunOpta's total revenue in 2014. Continued...