SunOpta Inc. announced that it has signed a definitive agreement to sell its Canadian natural health products distribution business (operated as Purity Life Natural Health Products) to an affiliate of Banyan Capital Partners. The transaction, valued at CDN $14,700,000, before transaction costs, is subject to certain conditions and pre-closing matters and is expected to close early in June 2012.
Purity Life Natural Health Products distributes a wide range of natural health products including dietary supplements, vitamins, natural body care and earth-friendly household goods throughout Canada, and also manufactures a number of natural health care products. Purity is believed to be the largest stand-alone distributor of these products in Canada. The business formed part of the Company's International
Foods Group. Purity has annual revenues of approximately CDN $60 million and contributed positively to SunOpta's first quarter 2012 earnings. The sale is expected to have a modest dilutive effect on earnings per share prior to the redeployment of the funds by the Company.
Banyan Capital Partners is an affiliate of Connor, Clark & Lunn Financial Group, a multi-boutique asset management firm that provides a broad range of distinct and independently managed investment products and services to Canadian individual and institutional investors. CC&L Financial Group and its affiliated companies collectively manage approximately $40 billion in financial assets under management.
Under the terms of the agreement, Banyan will pay cash on closing of CDN $14,000,000 and provide a CDN $700,000 note which is contingent on future EBITDA earnings targets. Matthew James, the existing President of Purity, will continue to lead the business under its new ownership group. All of the employees currently involved directly with the operations will be offered employment with Banyan.
Matthew James, President of Purity commented, "All of us at Purity are very excited about our new ownership group who are committed to the long-term stability and growth of our business. With our seasoned team of professionals remaining intact and based out of Acton, Ontario, we remain focused on improving the quality of the services that we supply as well as the innovation that we provide to the marketplace."
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "As part of our strategy to focus on our core integrated natural and organic foods sourcing and processing platform, we divested of our food distribution assets in mid-2010, and the divestiture of our natural health products assets and operations will complete our exit from the distribution business. This transaction further simplifies and focuses our business model while strengthening our balance sheet and positioning our Company for future growth opportunities. We believe Banyan will be a great owner for the business being they are Canadian based and are committed to continued development of the national natural health products distribution platform they have acquired. I want to express my sincere appreciation to the team at Purity for their hard work and commitment and wish them continued success under Banyan's leadership."