Leaf tobacco and agri-products supplier Universal Corporation announced this week that it entered into a definitive agreement to purchase specialty food ingredients producer Silva International for $170 million.
Silva processes more than 60 varieties of dehydrated vegetables, fruits and herbs from over 20 countries into dehydrated vegetable- and fruit-based ingredients used in a range of products. The company currently operates a 380,000-sq-ft manufacturing plant.
“We’re excited to have reached this agreement with Silva as we continue to diversify our offerings and generate new opportunities for value creation. This acquisition builds on our investment in FruitSmart and expands our plant-based ingredients platform,” Universal Corporation President and Chief Executive Officer George C. Freeman III said in a release.
Silva will become part of Universal’s plant-based ingredients platform once the deal closes, joining FruitSmart and Carolina Innovative Food Ingredients Inc. (CIFI). The company said it anticipates that the platform will account for 10% to 20% of its EBITDA by FY2022.
“With Silva as part of our plant-based ingredients platform, we will be able to offer customers a single source of vegetable and fruit ingredients solutions Silva, FruitSmart, and CIFI all serve similar industries, but have different product portfolios and minimal customer overlap,” Freeman said. “We expect to leverage significant commercial synergies between these businesses, and we are excited by the prospect of leveraging Universal’s global network of hundreds of thousands of farmers to drive growth across the platform.”
The transaction is slated to reach a conclusion this October. Following the transition of ownership, Silva’s current president, Kent DeVries, will join Universal to lead the Silva business. He will report to Patrick O’Keefe, senior vice president of Universal Global Ventures.
“It is clear that Universal was attracted to Silva for our significant capacity to source, process and manufacture high-quality ingredients. They also recognize the exceptional talent across our employee base and the deeply customized service that we consistently deliver to our customers,” DeVries wrote in a letter published on Silva’s website. “From our perspective, we believe that Universal is the ideal acquirer of Silva as they are committed to upholding the culture and mission that we have built over the last 40-plus years, while providing us with opportunities for collaboration and growth.”