Chiquita Brands International Inc and Seneca Foods Corp have signed a definitive agreement for Chiquita to sell all of the equity interests in its vegetable canning subsidiary, Chiquita Processed Foods LLC (CPF), to Seneca for approximately $125 million in cash and stock, plus the assumption of debt. Separately, Seneca announced that it has signed a memorandum of understanding for Lakeside Foods Inc to purchase four CPF facilities in the Midwest from Seneca.
The purchase price paid to Chiquita will consist of $110 million in cash and about 968,000 shares of Seneca preferred stock that will be convertible into an equal number of shares of Seneca series A common stock, which closed on the NASDAQ at $16.47 per share on March 6, 2003. Seneca will also assume CPF's debt, which amounted to $81 million Dec 31, 2002. Chiquita will use the cash proceeds primarily to reduce debt. The transaction is subject to certain conditions, including regulatory approval.
Under its memorandum of understanding with Seneca, Lakeside will purchase from Seneca certain of the CPF assets acquired from Chiquita, including plants in New Richmond and Eden WI and Owatonna MN. Lakeside will also acquire a CPF distribution center in Poynette WI and CPF's share of a sauerkraut joint venture plant at the same location.
