Universal Corp. to Buy FruitSmart
Leaf tobacco giant expands food ingredients portfolio
Leaf tobacco supplier Universal Corporation, Richmond, Va., agreed to purchase FruitSmart Inc., a Grandview, Wash., specialty fruit and vegetable ingredient processor serving global markets.
Universal Corporation expects to close its purchase of FruitSmart in the current fiscal year, subject to customary closing conditions. Following the close, Terry Chambers, FruitSmart president will continue with the same title and role.
Founded in 1982, FruitSmart supplies a broad set of juices, concentrates, blends, purees, fibers, seed and seed powders, and other value-added products to food, beverage and flavor companies throughout the United States and internationally through value-added processing of various fruit and vegetable products.
FruitSmart processes apples, grapes, blueberries, raspberries, cherries, blackberries, pears, cranberries and strawberries as well as other fruits and vegetables. The business is headquartered in the Yakima Valley of the state of Washington, where it has approximately 200 employees and two manufacturing facilities.
“Since outlining our capital allocation strategy in May 2018, we have been identifying a pipeline of strategic opportunities in adjacent markets around our core strengths: leveraging our highly localized rural infrastructure to source and process high-value, non-commodity, semi-perishable varietals from a large, reliant grower base for customers who demand fully traceable and compliant inputs,” said George C. Freeman, III, chairman, president and CEO of Universal Corporation.
Freeman added, “Given the worldwide addressable market opportunity for fruit and vegetable sourcing and processing, and the similar supplier dynamics and scale benefits to our existing business, this transaction represents a foundational step in building out a broader agri-products services platform and has the potential to be a new source of growth to drive future value creation for our shareholders.”
Universal (www.universalcorp.com) has three core business unit including Universal Ingredients. That division includes Carolina Innovative Food Ingredients Inc., (http://cifingredients.com) a Nashville, N.C., supplier of sweet potato-based ingredients.
Freeman concluded, “With a healthy balance sheet and a demonstrated ability to generate free cash flow, Universal Corporation will continue to explore additional growth opportunities in plant-based ingredients processing and other attractive adjacencies, while maintaining our commitment to our investment grade credit rating and to increasing our quarterly dividend on an annual basis, as we have done for 49 consecutive years. FruitSmart is a market leader for reliability of supply, high-quality products and customized solutions. We are excited to work with the talented and highly regarded FruitSmart management team to build on this strong foundation and FruitSmart’s demonstrated ability to achieve profitable growth.”
Said Terry Chambers, “By joining Universal Corporation, FruitSmart and our employees will benefit from Universal’s global agri-products services and supply chain management expertise, as well as the greater resources and enhanced scale of a larger, public company. Importantly, we will maintain our continued commitment to outstanding product quality and our strong relationships with our growers and our customers.”
Chambers said FruitSmart is well positioned to capitalize on recent shifts in market dynamics and consumer behavior including a secular shift towards health and wellness, favoring natural clean-label ingredient producers and the rise of fruit as a natural clean-label sweetener alternative to processed sugar. FruitSmart also stands to benefit from growing consumer interest in better-for-you premium ingredients, including custom blends, not-from-concentrate and dry products, and strong growth in targeted end markets utilizing FruitSmart products, including ciders, purees and nutraceuticals.
About Universal Corporation
Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, sources, processes, and supplies agri-products. Tobacco has been our principal focus since our founding in 1918, and we are the leading global leaf tobacco supplier. We conduct business in more than 30 countries on five continents. Our revenues for the fiscal year ended March 31, 2019, were $2.2 billion. For more information, visit www.universalcorp.com.