Apio eyes North America expansion with GreenLine Foods acquisition

US-based producer of fresh-cut vegetable products Apio has acquired GreenLine Foods from its private equity owner Riverside in a $63m all-cash deal, as a part of its strategy to boost its North American market share.

Apio has secured $31.8m in term financing and $25m working capital line from GE Capital to fund the acquisition, which does not include assumed debt.

Apio CEO Ron Midyett said that with this investment, the company has expanded its product range and customer base in retail grocery, added new foodservice customers, and gained control of strategic processing and distribution plants.

"These new capabilities will allow Apio to offer enhanced services to our customers with a broader range of products, all with a continued commitment to product quality and food safety," Midyett added.

The Apio Eat Smart brand and GreenLine brand together will have a market presence in about 80% of retail grocery outlets in the region, supplied by GreenLine’s East Coast processing and distribution facilities.

Under the agreement, Riverside will have a future earn-out potential of up to $7m if GreenLine reaches certain financial targets during fiscal 2012.

The acquisition is expected to be immediately accretive to Apio’s parent company Landec, which develops and markets patented products for food, agricultural and biomedical markets.

GreenLine Foods, headquartered in Ohio, US, has production facilities in Ohio, Pennsylvania, Florida, and California, and distribution centers in New York and South Carolina.

In addition to its focus on fresh-trimmed microwaveable green beans, the company has expanded its product line to include new produce items such as wax beans, bean blends, sugar snap peas and French green beans.

For the fiscal year 2013 beginning 28 May 2012, GreenLine’s revenues are expected to be around $95m to $100m, while EBITA is projected to be between $10m and $11m.