SunOpta Announces Strategic Sale of Its Specialty and Organic Soy and Corn Business to Pipeline Foods
February 25 2019 - 6:30AM
Business Wire
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a leading global company focused on organic,
non-genetically modified and specialty foods, today announced the
sale of its specialty and organic soy and corn business to Pipeline
Foods, LLC (“Pipeline Foods”) for $66.5 million, subject to certain
post-closing adjustments. The transaction closed on February 22,
2019.
“Our specialty and organic soy and corn business has a long
history of supplying high quality specialty, non-GMO and organic
ingredients to the food industry,” said John Ruelle, Senior Vice
President of Raw Material Sourcing and Supply at SunOpta. “I want
to thank all of our employees who are transitioning to Pipeline
Foods for their hard work and dedication. Each employee has had a
meaningful impact and contributed to the Company’s Value Creation
Plan during their time at SunOpta. We believe Pipeline Foods is
well positioned in this space, which should serve the industry well
and be positive for our transitioning employees.”
“We are excited by this incredible opportunity to grow our
business and expand the accessibility of organic and specialty
grains in the US,” said Eric Jackson, chief executive of Pipeline
Foods. “With this move, we are merging the newest team in the
sustainable agriculture supply chain business with the most tenured
and respected team in the business, and creating something even
better. With a focused passion, we seek to merge the best parts of
each organization’s culture, practices, experience, and
relationships to build a world-class business that can deliver
value to our farmer-partners as well as our customers.”
SunOpta's specialty and organic soy and corn business formed
part of its North American-based raw material sourcing and supply
segment and includes five facilities located in Hope, MN, Blooming
Prairie, MN, Ellendale, MN, Moorhead, MN and Cresco, IA. As part of
the deal, SunOpta and Pipeline Foods have entered into a multi-year
supply agreement for certain ingredients used in SunOpta’s consumer
products business. SunOpta will continue to operate its other North
American-based sourcing and supply operations, consisting of
sunflower and roasting operations, as well as its European-based
international sourcing and supply platform, known as Tradin
Organic, which were not part of the sale.
Additional details regarding the expected pro forma financial
impact from the sale, along with expanded commentary on this
development will be provided on SunOpta’s previously announced
Fourth Quarter 2018 Financial Results Release and Conference Call
scheduled for February 26, 2019.
Advisors
Raymond James & Associates, Inc. is serving as financial
advisor and Faegre Baker Daniels LLP is serving as legal advisor to
SunOpta.
Crowe LLP is serving as accounting and tax advisor and Saul
Ewing Arnstein & Lehr is serving as legal advisor to Pipeline
Foods.
About SunOpta Inc.
SunOpta Inc. is a leading global company focused on organic,
non-genetically modified ("non-GMO") and specialty foods. SunOpta
specializes in the sourcing, processing and packaging of organic
and non-GMO food products, integrated from seed through packaged
products; with a focus on strategic vertically integrated business
models. SunOpta's organic and non-GMO food operations revolve
around value-added grain, seed, fruit and vegetable-based product
offerings, supported by a global sourcing and supply
infrastructure.
About Pipeline Foods
With headquarters in Minneapolis, Minn., Pipeline Foods is
accelerating the availability and reliability of non-GMO, organic
and regeneratively grown food. We bring transparent, sustainable
supply chain solutions to connect the dots for our farming partners
and end users of organic grains and ingredients. Find us at
https://www.pipelinefoods.com/, on Twitter @PipelineFoods and
Facebook www.facebook.com/pipelinefoods/.
Forward-Looking Statements
Certain statements included in this press release may be
considered "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation, which are based on
information available to us on the date of this release. These
forward-looking statements include, but are not limited to, our
belief that Pipeline Foods is well positioned and should be able to
serve the industry well and be positive for transitioning
employees. Terms and phrases such as “believe”, “should”,
“continue”, "expected", "plans", “will” and other similar terms and
phrases are intended to identify these forward looking statements.
Forward looking statements are based on information available to us
on the date of this release and are based on estimates and
assumptions made by the Company in light of its experience and its
perception of historical trends, current conditions and expected
future developments as well as other factors the Company believes
are appropriate in the circumstances. The Company makes no
representation that reasonable business people in possession of the
same information would reach the same conclusions. Whether actual
timing and results will agree with expectations and predications of
the Company is subject to many risks and uncertainties including
the availability and attractiveness of potential strategic
investments for the Company, delays or other potential issues in
transitioning employees to Pipeline Foods as well as other risks
described from time to time under "Risk Factors" in the Company's
Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q
(available at www.sec.gov). Consequently, all forward-looking
statements made herein are qualified by these cautionary statements
and there can be no assurance that the actual results or
developments anticipated by the Company will be realized.
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Scott Van WinkleICR617-956-6736scott.vanwinkle@icrinc.com
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