United Natural Foods, Inc. (UNFI) entered into a definitive agreement today to acquire the Canadian distribution assets of SunOpta, an Ontario-based food manufacturer. The deal carries a $66 million price tag and is expected to close in early June.
The sale aligns with SunOpta’s strategic plan to strengthen its balance sheet—proceeds will be used to retire debt—and focus on core businesses. The assets in question posted $170 million in sales in fiscal year 2009, and should strengthen UNFI’s organic and specialty businesses.
NBJ Bottom Line
Analysts expect a relatively easy integration, so UNFI continues to find attractive ways to expand its reach. By gaining a foothold in Canada, the company should quickly achieve synergies in purchasing power, distribution and logistics that boost bottom-line performance. Perhaps more importantly, this deal could spell trouble for Tree of Life, as they work through a major integration with Kehe Distributors. As the largest distributor of natural foods and personal care products in the U.S., UNFI just took one small step toward becoming an even larger player on the international front. Tree of Life, already an operator of three distribution centers in Canada, should take careful note.
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