NEW YORK – Chiquita Brands International Inc. (CQB) said Wednesday it will the buy Performance Food Group Co.'s (PFGC) bagged salad maker unit, Fresh Express (search), for $855 million in cash, to help reduce its dependence on bananas.
Chiquita, which distributes fruit in addition to bananas, said the deal is expected to close in the second quarter of 2005 and be accretive to earnings in 2006.
Cincinnati-based Chiquita said the acquisition will help it expand its North American business. Fresh Express has about $1 billion in revenues and 40 percent of the U.S. retail market share in packaged salads, the company said.
Chiquita, which will use cash, debt and convertible securities to finance the purchase, said that it expects $20 million in cost savings annually.
Performance said in a separate statement that it expects net proceeds from the sale after taxes and expenses to be about $695 million. It plans to use $290 million of that to repay its debt. The rest will go toward share buybacks, cash dividends or both.
The Richmond, Va. company said the purchase will allow it to focus on food service distribution.
Morgan Stanley advised Chiquita and Goldman Sachs advised Performance.