May 11 2010
SunOpta Inc. ("SunOpta" or the "Company") (Nasdaq:STKL) (TSX:SOY) today announced that it has entered into a definitive agreement with United Natural Foods, Inc. ("UNFI") and a wholly-owned subsidiary of UNFI to sell the Company's Canadian Food Distribution Assets for cash consideration of approximately CDN $68 million. The transaction is subject to certain customary closing conditions and is expected to be completed by early June 2010.
The Food Distribution Assets included in this transaction form part of the SunOpta Distribution Group ("SDG"). SunOpta will retain the natural health products distribution and manufacturing assets which represent the balance of the assets in SDG. Active employees currently directly involved in the Canadian food distribution operations will be offered employment with UNFI, the leading distributor of natural, organic and specialty foods in the United States.
For fiscal 2009, the SunOpta Distribution Group realized revenues of US $237.3 million. The Canadian food distribution operations generated revenues of US $169.6 million and positive operating earnings while the natural health products operations generated the balance of the revenues of US $67.7 million, realizing negative operating earnings due in most part to additional costs in the year related to the relaunch of a number of natural health products brands. The Company expects to realize a net gain on the sale of the Canadian food distribution assets, dependent upon a number of closing matters and related costs. In addition, the transaction is expected to have a small dilutive effect of $0.02 on earnings per share in 2010, prior to the expected gain on the sale. Net proceeds from the sale will be used to reduce existing debt.
"This acquisition is the latest step in our strategy to grow our organic and specialty foods business and represents an opportunity for UNFI to diversify its operations by entering into the Canadian market," commented Steve Spinner, President and Chief Executive Officer of UNFI. "We are excited about entering the dynamic Canadian market and feel terrific in welcoming this business to our organization."
Steve Bromley, President and Chief Executive Officer of SunOpta, commented, "In 2002, we started to build our natural, organic and specialty food and natural health products distribution business in Canada. We are very proud of the attractive platform that has been put in place. Divesting the food distribution assets is an important milestone in our strategy to focus on our core food manufacturing platform, strengthening our balance sheet and positioning the Company for the future. We have long admired UNFI's strong values and commitment to the natural, organic and specialty foods industry, and believe they will bring great value to the Canadian marketplace. We want to express our sincere appreciation to our dedicated employees for their years of hard work and dedication and wish them continued success under UNFI's leadership."
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