SunOpta Announces Completion of Global Ingredients Sale, Full Redemption of $223.5MM 9.5% Senior Second Lien Notes & Signing ...
January 04 2021 - 6:30AM
Business Wire
Divestiture increases SunOpta’s focus on
value-added plant-based foods and beverages
Provides financial flexibility to further
accelerate growth in plant-based beverage platform
Reduces net debt by approximately
$355MM
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a leading company focused on plant-based foods and
beverages and fruit-based foods and beverages, today announced
completion of the sale of the Company’s global ingredients segment
and related assets to Amsterdam based global commodity trading
company, Amsterdam Commodities N.V. (Euronext: ACOMO) for cash and
debt free consideration of €330 million. The transaction closed on
December 30, 2020.
“I’m pleased to announce the completion of this strategically
transformational divestiture. This transaction further solidifies
SunOpta’s future direction as a high-growth, plant-based company
focused on providing value-added products in competitively
advantaged categories with consistent, sustainable, above average
growth characteristics. This transaction significantly de-levers
and strengthens SunOpta’s balance sheet, enabling the acceleration
of expansion plans in our fast-growing plant-based food and
beverage segment. The plans include both high-return capital
investment projects, as well as synergistic acquisitions that add
to an existing set of strong capabilities in our core plant-based
beverage platform. This is a very exciting time for us at SunOpta
as we look forward to building on our successes,” said Joe Ennen,
Chief Executive Officer of SunOpta.
On December 31, 2020, SunOpta entered into a five-year credit
agreement for a senior secured asset-based revolving credit
facility in the maximum aggregate principal amount of $250 million,
subject to borrowing base capacity. In addition, as part of the
same facility, the lenders provided a five-year, $75 million
delayed draw term loan, to be used for capital expenditures. The
delayed draw term loan can be borrowed within 18 months from
closing. This new credit facility with decreased interest rates
replaces SunOpta's previous facility that was set to expire on
March 31, 2022. The new credit facility will be used to support the
working capital, capital expenditures, and general corporate needs
of SunOpta’s operations, in addition to funding future strategic
initiatives. Borrowings under the revolving credit facility and
delayed draw term loan bear interest based on various reference
rates including LIBOR plus an applicable margin. The applicable
margin on the new revolving facility ranges from 1.50% to 2.00% for
loans bearing interest based on LIBOR with a 0.25% step down in the
margin when the Company’s total leverage ratio is below an agreed
threshold. The applicable margin on the term loan ranges from 2.25%
to 2.75%. The applicable margins are set quarterly based on average
borrowing availability. The obligations of the borrowers under the
facility are guaranteed by substantially all of SunOpta’s
subsidiaries and, subject to certain exceptions, such obligations
are secured by first priority liens on substantially all assets of
SunOpta and the other borrowers and guarantors. The credit facility
contains customary covenants and borrowing availability
requirements. The facility is provided by a syndicate of banks,
including Bank of America, N.A., JP Morgan Chase Bank, N.A.,
Rabobank Nederland, Canadian Branch, Bank of Montreal, and Wells
Fargo Bank, National Association.
On December 31, 2020, SunOpta also retired in full its 9.5%,
$223.5 million second lien notes due in October 2022. The
retirement of the second lien notes reduces interest expense by
approximately $21 million on an annual basis. In total, debt was
reduced by approximately $355 million between the payoff of the
second lien notes and paydowns of the existing credit facility on
December 31, 2020.
Interest expense, on an annualized basis, would decrease from
approximately $29 million to approximately $4 million based on the
weighted-average interest rates as at September 26, 2020.
“We are pleased with the extension of the credit facility and
appreciate the support of our banking partners as we continue to
execute our strategic plans to deliver strong performance,” said
Scott Huckins, Chief Financial Officer of SunOpta. “The new credit
facility provides enhanced flexibility and increased liquidity to
support our operational initiatives and growth objectives. The
delayed draw term loan is a very cost-effective tool to continue to
invest in and grow our plant-based beverage platform.”
About SunOpta Inc.
SunOpta Inc. is a leading company specializing in the sourcing,
processing and production of organic, natural and non-GMO plant-
and fruit-based food and beverage products.
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
expectation that the transaction will enable the acceleration of
near-time expansion plans and will be accretive to the Company’s
long-term growth rate and margin profile further focusing the
Company on delivering more consistent financial results for our
shareholders. Terms and phrases such as “expected”, “plans”,
“believe”, “will”, “continue”, “anticipate”, “estimates”, “should”,
“would”, “intend”, “may” 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 including, but not limited to, the
Company’s actual financial results; management’s assessment of the
incremental capacity and margin to be realized from the expansion
and capital investment projects for which the proceeds of the
transaction will be used; current customer demand for the Company’s
products; the anticipated impact of COVID-19 on the Company’s sales
and productivity; general economic conditions; continued consumer
interest in health and wellness; the Company’s ability to maintain
product pricing levels; planned facility and operational
expansions, closures and divestitures; cost rationalization and
product development initiatives; alternative potential uses for the
Company’s capital resources; portfolio optimization and
productivity efforts; the sustainability of the Company’s sales
pipeline; the Company’s expectations regarding commodity pricing,
margins and hedging results; improved availability and field prices
for fruit; procurement and logistics savings; freight lane cost
reductions; yield and throughput enhancements; and labor cost
reductions. 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 predictions of the Company is subject to many
risks and uncertainties including the inability to satisfy, or
potential delays in satisfying, any of the closing conditions
applicable to the transaction; the availability and attractiveness
of potential high-return capital investments and synergistic
acquisitions for the Company; delays or other potential issues in
enabling the acceleration of near-term expansion plans in our
fast-growing plant-based food and beverage segment; potential loss
of suppliers and customers as well as supply chain, logistics and
other disruptions resulting from or related to COVID-19; unexpected
issues or delays with the Company’s structural improvements and
automation investments; failure or inability to implement portfolio
changes, process improvements, go-to-market improvements and
process sustainability strategies in a timely manner; changes in
the level of capital investment; local and global political and
economic conditions; consumer spending patterns and changes in
market trends; decreases in customer demand; delayed or
unsuccessful product development efforts; potential product
recalls; working capital management; availability and pricing of
raw materials and supplies; potential covenant breaches under the
Company’s credit facilities, 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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version on businesswire.com: https://www.businesswire.com/news/home/20210104005129/en/
Scott Van Winkle ICR 617-956-6736 scott.vanwinkle@icrinc.com
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