Landec Corporation Completes Sale of Fresh Packaged Salads and Vegetables Business for $73.5 Million

Strategic Insights -

Landec Corporation has announced the completion of the sale of its fresh packaged salads and vegetables business to Taylor Farms, Inc. for $73.5 million in cash. This milestone marks an important step in the company's framework for enhancing the value and performance of the Curation Foods business, and demonstrates its ongoing efforts to extract value from non-core assets and re-orient around its rapidly growing Lifecore Biomedical business.

As part of the transaction, Landec has agreed to provide certain customary transition services to Taylor Farms related to the business for up to six months, in exchange for a monthly fee. The sale includes the assets exclusively associated with Curation Foods' core fresh vegetable bag, tray, and salad businesses, including its flagship brand Eat Smart, representing revenue of approximately $366 million in the trailing twelve month period ended August 29, 2021. The transaction does not include the company's avocado products or technology businesses, which are being retained.

The net proceeds from the transaction will be used to repay borrowings under the Company's credit facility, which is expected to drive significant deleveraging and strengthen the Company's financial position. This will enable management to devote resources to further support the growth and expansion of the Lifecore Biomedical business.

Key Takeaways:

  • Landec Corporation has completed the sale of its fresh packaged salads and vegetables business to Taylor Farms, Inc. for $73.5 million in cash.
  • The sale includes the assets exclusively associated with Curation Foods' core fresh vegetable bag, tray, and salad businesses, representing revenue of approximately $366 million in the trailing twelve month period ended August 29, 2021.
  • The transaction does not include the company's avocado products or technology businesses, which are being retained.
  • The net proceeds from the transaction will be used to repay borrowings under the Company's credit facility, driving significant deleveraging and strengthening the Company's financial position.
  • Landec has agreed to provide customary transition services to Taylor Farms for up to six months, in exchange for a monthly fee.
  • The sale is expected to be reported as discontinued operations beginning in the fiscal third quarter of 2022.
  • Landec will host a conference call on January 5, 2022, to discuss fiscal 2022 second quarter financial results and implications of the transaction.

Statistics:

  • $73.5 million: The sale price of the fresh packaged salads and vegetables business.
  • $366 million: The revenue of the Curation Foods business in the trailing twelve month period ended August 29, 2021.
  • $67.9 million: The net proceeds from the transaction, after deducting for total transaction related costs and debt prepayment fees.
  • 6 months: The duration of the transition services agreement with Taylor Farms.
  • 30 days: The availability of the conference call webcast.

Sources:

  • Landec Corporation, "Landec Completes Sale of Curation Foods' Fresh Packaged Salads and Vegetables Business" (press release, December 13, 2021)
  • Landec Corporation, "Landec Announces Fiscal Second Quarter Financial Results and Implications of the Transaction" (press release, January 5, 2022)
  • Landec Corporation, "Landec Corporation Reports Fiscal 2022 First Quarter Financial Results" (press release, November 30, 2021)