Landec Corporation (Nasdaq:LNDC), a company that develops and markets
patented products for food, agricultural and biomedical applications,
announced today that its wholly owned food subsidiary, Apio, Inc., has
acquired GreenLine Foods, Inc. from The Riverside Company, a global
private equity firm. GreenLine Foods, headquartered in Perrysburg, Ohio,
is the leading processor and marketer of value-added, fresh-cut green
beans in North America. The acquisition is expected to be immediately
accretive to Landec. For Landec’s upcoming fiscal year 2013 beginning
May 28, 2012, GreenLine’s revenues are projected to be approximately $95
million to $100 million and EBITDA is estimated to be between $10
million to $11 million.
The acquisition of GreenLine combines two leading brands in the
fresh-cut produce market, the Apio Eat Smart® brand and the GreenLine®
brand, resulting in combined market presence in approximately 80% of
North American retail grocery store sites, supported by GreenLine’s
strategic and extensive East Coast processing and distribution
facilities. GreenLine’s primary production facilities are located in
Bowling Green, Ohio and Hanover, Pennsylvania. Additional production
facilities are located in Vero Beach, Florida and Pico Rivera,
California with distribution centers in Chester, New York and Rock Hill,
South Carolina. The addition of GreenLine’s significant footprint on the
East Coast and dedicated fleet of privately operated trucks complements
and strengthens Apio’s California base of operations.
Under the agreement with Riverside, Apio acquired all of the outstanding
equity interests of GreenLine for $63.0 million in cash with no assumed
debt. The agreement also includes future earn-out potential for
Riverside of up to $7.0 million based on GreenLine achieving certain
financial targets during calendar year 2012. In conjunction with the
acquisition, Apio obtained $31.8 million in term financing secured by
Apio’s and GreenLine’s fixed assets. In addition, Apio entered into a
five-year, $25.0 million working capital line, with an interest rate of
LIBOR plus 2%, based on the combination of Apio and GreenLine accounts
receivable and eligible inventory balances. The term debt is comprised
of a $12.7 million equipment loan which matures in seven years with a
fixed interest rate of 4.37% and a $19.1 million real estate loan that
matures in ten years with a fixed interest rate of 4.02%. Both the term
financing and the working capital line are being financed by GE Capital.
For the fiscal year ending May 27, 2012, Landec will record
approximately $800,000 of acquisition related expenses. In addition, the
Company will record approximately $1.0 million of loan origination fees
which will be amortized over approximately seven years. The Company is
forecasting that GreenLine’s operating results for the period from the
close of the acquisition to our fiscal year end of May 27, 2012 will
offset a majority of the acquisition related expenses.
For fiscal year 2012, as a result of including GreenLine operating
results for the last five weeks, we are increasing our revenue guidance
and maintaining our net income guidance.