SunOpta Inc. , a seller of natural, organic and specialty foods, has sold its frozen fruit processing business in Mexico a private company Fruvemex Mexicali S.A. de CV.
The sale price of the businesses in the Mexican communities of Rosarito and Irapuato is $3.15 million, the Toronto company announced Monday.
SunOpta said it also entered into a strategic raw material supply deal with Fruvemex, plus a lease for Fruvemex's use of the land and buildings in Irapuato which SunOpta will continue to own.
Fruvemex is a privately owned Mexican company based in Mexicali and has long been a supplier to SunOpta. It produces strawberries, mango, melons, hot peppers, bell peppers, tomatoes, onions and salsas.
"This divestiture is the latest step in our strategy to improve the profitability of our frozen fruit operations and continue to simplify our business model with a focus on our core areas of expertise, plus expand strategic relationships to secure long-term supply." president and CEO Steve Bromley said in a release before stock markets opened.
"We believe that Fruvemex will be an excellent long term partner and provide SunOpta with cost competitive fruit products."
The purchase price involves a $750,000 cash payment, with the rest to be paid over the next year.