Fyffes buys Canadian firm All Seasons Mushrooms for €41m

Food distributor Fyffes has acquired a second large Canadian mushroom business just months after it bought Highline Produce for €99 million.

The company said on Thursday it had acquired All Seasons Mushrooms for CAD$59.1 million (€40.8 million) to acquire 100 per cent of the equity in the company and refinance its debt. Fyffes said it was funding the deal through existing bank debt.

The transaction is expected to be immediately accretive for Fyffes, the group said.

Four facilities

All Seasons, which is based in British Columbia, is one of the largest mushroom producers in Western Canada. It is a fully integrated producer operating from four facilities, of which three are owned and one is leased. The company's current chief executive, Frank Moscone, is to remain in the business following the acquisition.

Fyffes has based its CAD$59.1 million valuation of All Seasons on a 7.5 times multiple of its 2015 reported earnings before interest, taxes, depreciation, and amortisation(ebitda) of CAD$7.8 million.

The group said that in the absence of further investment activity it would expect its 2016 year-end net debt to be less than 2.75 times ebitda.

The estimated book value of All Season’s net assets amounts to CAD$39 million (€26.9 million) on a debt-free basis.

Given the timing of this transaction, the impact on Fyffes 2016 earnings is expected to be limited to a 1 per cent increase in adjusted earnings per share (EPS). On an annualised basis, the All Seasons transaction would increase Fyffes’ current 2016 target adjusted EPS range by about 5 per cent.

“We are very pleased to have acquired All Seasons. It represents an excellent strategic addition to the Highline business which we acquired earlier this year,” said Fyffes chairman David McCann.

“Together, Highline and All Seasons will be well placed to provide Canadian customers with a consistent supply of the highest-quality mushrooms from coast to coast, while continuing to strategically supply US customers with premium and organic mushrooms,” he added.