Del Monte Foods Company (NYSE: DLM) yesterday announced that it has entered into a definitive agreement with UniMark Group, Inc. (Nasdaq: UNMG), a marketer, specialty processor and distributor of chilled and frozen citrus and other fruits, under which Del Monte will acquire the world-wide rights to UniMark’s Sunfresh® brand and UniMark’s McAllen, Texas distribution center, including certain inventory associated with the Sunfresh® brand. UniMark, an industry pioneer, was the first company to introduce quality processed fruit in glass jars into the produce section.
“With its well-recognized brand name and high quality fruit products, the Sunfresh® line is a perfect fit with Del Monte Foods,” said Richard G. Wolford, Chairman and Chief Executive Officer of Del Monte. “The addition of their premium tropical and citrus fruit in jars enhances our growing presence in the produce section, one of the fastest growing segments in retail food. Del Monte intends to market and distribute this new line of Sunfresh® brand citrus and tropical fruits along with its own Orchard Select® brand of premium quality fruits in glass jars. Together, these two brands will benefit from our strong customer relationships and category management expertise.”
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Del Monte and UniMark also have entered into a long-term supply contract under which UniMark will produce chilled and canned citrus products for Del Monte at UniMark’s existing facilities in Mexico.
“The UniMark supply agreement provides us with a platform to continue our strategic expansion into new, fast growing segments of the retail food industry,” Wolford continued. “We will use UniMark’s modern manufacturing facilities, which are geared to produce refrigerated processed fruit, to support the development of new Del Monte branded products. This is another unique opportunity for Del Monte to leverage its brand power beyond its traditional canned food base.”
Wolford continued, “Del Monte’s acquisition strategy has always been to acquire branded food companies or product lines which will allow us to expand our category presence, introduce new products and packaging and achieve operating synergies — the UniMark transaction meets all of these stringent requirements. We are very excited about this opportunity.”
“We have no doubt that the Sunfresh (R) brand will flourish under Del Monte’s ownership. Del Monte’s relationships with channel partners are unrivaled,” said Soren Bjorn, President and CEO of The UniMark Group. “We are confident that this transaction and manufacturing agreement will increase our plant utilization, enhance sales in key international markets and enable both companies to benefit from new product ideas. We believe this marks the beginning of a long-term relationship with one of America’s most respected companies.”
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By GlobalDataThe transaction, which is valued at $14.5 million and subject to adjustment for inventory levels, is expected to close by September 2000.
The UniMark Group, Inc., a vertically integrated citrus and tropical fruit growing, processing, marketing and distribution company with operations in Mexico, the United States and Canada, had $66 million in revenues in 1999, and is headquartered is in Bartonville, Texas.
Del Monte Foods Company, with net sales of $1.5 billion in fiscal 2000, is the largest producer and distributor of premium quality, branded processed fruit, vegetable and tomato products in the United States. The Del Monte brand was introduced in 1892 and is one of the best known brands in the United States. Del Monte products are sold through national grocery chains, independent grocery stores, warehouse club stores, mass merchandisers, drug stores and convenience stores. The Company also sells its products to the U.S. military, certain export markets, the foodservice industry and food processors. The Company operates fourteen production facilities in California, the Midwest, Washington and Texas and six distribution centers.
This press release contains forward-looking statements conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve inherent risks and uncertainties and the Company cautions you that a number of important factors could cause actual results to differ materially from those contained in such statements. These factors include, among others: general economic and business conditions; competition; weather conditions; crop yields; raw material costs and availability; the loss of significant customers; changes in business strategy or development plans; changes in promotional activities by the Company or its competitors; availability, terms and deployment of capital; availability of qualified personnel; changes in, or failure or inability to comply with, governmental regulations, including, without limitation, environmental regulations; industry trends; production capacity constraints and other factors. These factors are described in more detail in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the fiscal year ended June 30, 1999. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
