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Limoneira Makes Strategic Acquisition of Pan de Azucar S.A.

Limoneira Makes Strategic Acquisition of Pan de Azucar S.A.



SANTA PAULA, CA – Extending its prodigious footprint even further throughout the globe, Limoneira Company has just completed the strategic acquisition of Chile-based Pan de Azucar S.A. (PDA). 

Harold Edwards, President and CEO, Limoneira"With its favorable climate for citrus, PDA's productive orchards and strong relationship with Rosales was a perfect fit for our international expansion plans. Our acquisition of PDA is consistent with our long-term strategy to expand our agribusiness internationally as a global, year-round supplier of lemons complementing our One World Of Citrus™ strategy,” stated Harold Edwards, President and CEO of Limoneira. “We expect the acquisition to be immediately accretive and will benefit our business by owning more productive acreage and increasing our ownership in Rosales." 

Through this purchase, Limoneira has acquired around 210 acres of lemon and orange orchards located near La Serena, Chile. According to a press release, this purchase has also provided Limoneira with an equity interest in Rosales, S.A., which packs, markets, and sells citrus in the same region as PDA. 

Alex Teague, Senior Vice President and Chief Operating Officer, Limoneira"We are very excited about our expansion in Chile," said Alex Teague, Senior Vice President of Limoneira. "The majority of the orchards we acquired are young and just beginning to enter into its prime production time period. Our management team has a long-standing relationship with PDA, and we are excited they are now part of the Limoneira team. Along with expanding our participation in the growing global lemon business, this enables Limoneira to provide citrus on a year-round basis to our customers around the world and evaluate future potential investment opportunities in Chile's vast, productive agricultural properties."

Limoneira stated that it expects annual production increases from PDA’s orchards, because the majority of the trees are young and will increase yield as they mature. Rosales packs and sells all of PDA’s citrus production, and also partners with Limoneira’s One World of Citrus™ marketing team to sell its produce throughout Chile and the world.

The acquisition was completed on February 24, 2017, through Limoneira’s wholly owned subsidiary Limoneira Chile SpA. Limoneira acquired 90% of outstanding stock for PDA for around $5.8 million in cash. Limoneira will now own 48% of Rosales, and PDA’s 10% stockholder will own the remaining 52%. 

PDA had approximately $450,000 of net income on around $1.9 million in sales for the year ending on December 31, 2016. PDA's operation results will be included in Limoneira’s consolidated results of operations from its acquisition date. 

PDA also had approximately $1.7 million in long term debt, which was assumed in the transaction. The company stated that a holdback of 10% of the purchase proceeds to be paid to the seller were withheld for a six-month period to allow for potential contingencies. PDA's total assets of approximately $5.5 million on the acquisition date includes a 13% equity interest in Rosales in which the Company owns a 35% equity investment, which was acquired in 2014.

La Serena is in a coastal region of Chile, and serves as a major citrus and avocado growing area of the country. 

As Limoneira and other companies look to extend their international reach, count on AndNowUKnow for the breaking news.

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Limoneira

The Limoneira Company was founded in Ventura County, California in 1893. Its founders were pioneers of spirit and vision...