Richmond-based tobacco leaf merchant Universal Corp. is broadening its portfolio in other agricultural businesses with an acquisition of a vegetable, fruit and herb processing company.
Universal said Tuesday that it has agreed to acquire Silva International for $170 million in cash.
Based in Momence, Ill., near Chicago, Silva International operates a processing plant and provides dehydrated vegetable, herb and fruit ingredients to the food industry. The company buys produce from around the world to process as food ingredients such as basil, dill, pepper, pumpkin and onion.
Universal plans for Silva to operate as part of Universal’s plant-based ingredients business platform, which includes FruitSmart Inc., and Carolina Innovative Food Ingredients Inc.
Universal Corp. is a Fortune 1000 company that reported $1.9 billion in revenue for its most recent fiscal year that ended March 31. The company’s largest business is buying and processing tobacco leaf from farms around the world, but the company also has been diversifying into other agricultural businesses such as sweet potato processing. It created Carolina Innovative Food Ingredients Inc. in 2014 to produce dehydrated and juiced fruit and vegetable products that are sold to manufacturers for use in food products and pet foods.
In January, Universal acquired FruitSmart, a specialty fruit and vegetable ingredient processor based in Grandview, Wash. Universal has said it wants its agricultural product services platform to eventually represent 10% to 20% of the company’s earnings.
Universal said it expects to complete the acquisition in October and the new business to add to earnings in the next fiscal year. The company is paying for the deal with cash on hand and its revolving credit facility.
Silva employs more than 200 people and has a 380,000-square-foot manufacturing plant. Universal said that Kent DeVries, president of Silva, will continue to manage the business and report to Patrick O’Keefe, senior vice president of Universal Global Ventures.
“With Silva as part of our plant-based ingredients platform, we will be able to offer customers a single source for vegetable and fruit ingredients solutions,” said George C. Freeman III, Universal’s chairman, president and chief executive officer. “Silva, FruitSmart, and CIFI [Carolina Innovative Food Ingredients] all serve similar industries but have different product portfolios and minimal customer overlap.”
Harris Williams, a Richmond-based investment bank specializing in mergers and acquisitions advisory services, is advising Universal on the pending acquisition of Silva.
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September 09, 2020 at 05:45AM
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Richmond-based Universal Corp. plans acquisition of vegetable, herb and fruit processing company - Richmond.com
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