SOY stock soars as it exits frozen fruit business

Shares of SunOpta (SunOpta Stock Quote, Chart, News, Analysts, Financials TSX:SOY) lead the TSX today after announcing the sale of its frozen fruit assets.

SOY will sell its frozen fruit assets to Quebec-based Nature’s Touch for $141-million, the sale includes two facilities, one in Mexico and another in Kansas.

The segment of SunOpta’s business was generating $263-million in revenue and about $15-million in EBITDA.

The company’s CEO said the move is in-line with the direction the company wants to take.

“The divestiture of our frozen fruit business is a major milestone in our portfolio optimization efforts and our multi-year transformation to becoming a leading manufacturer of value-add products in plant-based and healthy snack categories,” said Joe Ennen. “This transaction is significantly accretive to margins, results in a more capital efficient business model, strengthens our balance sheet and ensures we are singularly focused on the most attractive growth opportunities. We are also pleased with our third quarter revenue growth from our continuing plant-based and healthy snacks operations and the strong demand we experienced across key products and categories throughout the period. Importantly, volume was the primary factor driving our third quarter growth reflecting market share gains and total addressable market expansion efforts. Our latest results continue to reflect the competitive advantages that underpin our value-add business model including a scalable, geographically diverse platform with proven expertise in complex manufacturing coupled with leading innovation capabilities.”

At press time, shares of SunOpta were up 26.2 per cent to $4.92.