Chiquita Brands International Inc has completed its previously announced acquisition of the Fresh Express unit of Performance Food Group (PFG). The acquisition will increase Chiquita's consolidated annual revenues by about $1 billion.
"Fresh Express fits well into our sustainable growth strategy as we continue to focus on satisfying the primary consumer needs of health, taste, and convenience," said Fernando Aguirre, Chiquita's chairman and chief executive officer. "The acquisition, which we expect to be accretive in the first 12 months, will help us diversify our business and improve the quality of our earnings."
With this acquisition, Chiquita adds the Fresh Express brand, which has earned the number one share at 41% in the United States retail salads market.
In related news, PFG plans to spend as much as $315 million to buy back 10 million, or roughly 21%, of its outstanding shares through a "Dutch auction" tender offer. The foodservice distributor said it will buy back the shares at a price between $27.50 and $31.50 per share.
Under the Dutch auction, shareholders specify a price within the range at which they want to sell their shares. After receiving all offers, PFG will select the lowest price within the range that will permit it to buy back the desired number of shares.
This share buyback is part of a strategy to return capital from the Fresh Express sale to shareholders. The tender offer expires August 11, unless extended.
