Canada-based organic food company SunOpta has entered into an agreement to sell Opta Minerals business to Speyside Equity Fund for CAD$6.2m ($4.4m), in order to focus on its core business of food distribution.
The acquisition proposal has been approved by Opta Minerals' Boards of Directors, which has also recommended Opta Minerals' shareholders to give a nod to the transaction.
The sale follows a strategic evaluation conducted by Opta Minerals and its financial advisor, under the supervision of a special committee of independent directors.
SunOpta expects to receive CAD$4.2m in cash and the rest of the CAD$2m will be in the form of subordinated promissory note of Opta Minerals with 2% interest maturing 30 months after the transaction is complete.
The deal is expected to be closed in early April, following customary conditions and shareholders' approval.
SunOpta president and CEO Rik Jacobs said: "The sale of Opta Minerals represents a significant milestone, and we are pleased to be concluding this chapter of our company's history as it paves the way for SunOpta to truly become a pure-play healthy and organic foods company.
"Following completion of the deal, our entire team will be able to focus solely on the growth and strategic priorities of our vertically-integrated international foods business, and the sale will further simplify our reporting. In addition to the greater financial flexibility created by our new expanded credit facility, our balance sheet will no longer reflect the debt associated with Opta Minerals."
The pending transaction is expected to result in a non-cash impairment charge for SunOpta ranging $15m to $17m in the fourth quarter of 2015.
In 2011, SunOpta attempted to sell Opta Minerals but abandoned the plan in the wake of tough economic conditions, reported Foodingredientsfirst.com.
According to Rik Jacobs, the sale would help SunOpta gain financial flexibility in the near future.
Following the deal, Opta Minerals will be delisted from the Toronto Stock Exchange in March 2016, the publication reported.
SunOpta produces organic, non-genetically modified (non-GMO) and specialty foods. The company is focused on sourcing, processing and packaging of organic and non-GMO food products.
The company claims that its organic and non-GMO food operations offer value-added grain, seed, fruit and vegetable based products.
