Calavo Growers Completes Acquisition, Announces Executive Changes

TL;DR

Calavo just bought stuff from Del Monte and changed some execs. Big moves ahead.

AI Summary

On August 15, 2024, Calavo Growers, Inc. announced the completion of its acquisition of certain assets from Fresh Del Monte Produce Inc. The filing also disclosed the departure of a director and the appointment of a new officer, along with details on compensatory arrangements. Additionally, the company entered into a material definitive agreement and incurred financial obligations related to these events.

Why It Matters

This acquisition could significantly expand Calavo Growers' market presence and product offerings, while executive changes may signal a shift in strategic direction.

Risk Assessment

Risk Level: medium — The acquisition and associated financial obligations introduce integration risks and potential impacts on future financial performance.

Key Players & Entities

• Calavo Growers, Inc. (company) — Registrant
• Fresh Del Monte Produce Inc. (company) — Seller of acquired assets
• August 15, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value per share CVGW Nasdaq Glo
• $30,980,000 — Eastridge Ave, Riverside, CA 92507 for $30,980,000. In addition, pursuant to the Asset Pu
• $52,020,000 — ed in the Asset Purchase Agreement) was $52,020,000, subject to certain adjustments relatin
• $90,000,000 — e revolving commitments thereunder from $90,000,000 to $75,000,000 and (B) reduce the machi
• $75,000,000 — mitments thereunder from $90,000,000 to $75,000,000 and (B) reduce the machinery and equipm
• $6,800,000 — and equipment subline of the loans from $6,800,000 to $1,703,476.02, and the related month
• $1,703,476 — subline of the loans from $6,800,000 to $1,703,476.02, and the related monthly amortizatio
• $80,952.38 — rtization payments on such subline from $80,952.38 to $24,335.37, and (ii) the Borrower ob
• $24,335 — ents on such subline from $80,952.38 to $24,335.37, and (ii) the Borrower obtained cons

Filing Documents

• cvgw-20240815x8k.htm (8-K) — 54KB
• cvgw-20240815xex10d1.htm (EX-10.1) — 704KB
• cvgw-20240815xex10d2.htm (EX-10.2) — 1086KB
• cvgw-20240815xex10d3.htm (EX-10.3) — 105KB
• cvgw-20240815xex99d1.htm (EX-99.1) — 9KB
• cvgw-20240815xex99d2.htm (EX-99.2) — 371KB
• cvgw-20240815xex99d1001.jpg (GRAPHIC) — 8KB
• 0001558370-24-012417.txt ( ) — 2749KB
• cvgw-20240815.xsd (EX-101.SCH) — 3KB
• cvgw-20240815_lab.xml (EX-101.LAB) — 15KB
• cvgw-20240815_pre.xml (EX-101.PRE) — 10KB
• cvgw-20240815x8k_htm.xml (XML) — 5KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Asset Purchase Agreement and Purchase and Sale Agreement On August 15, 2024, Calavo Growers, Inc., a California corporation (the " Company "), the Seller Parties (as defined in the Asset Purchase Agreement (as defined below)), F&S Produce Co., Inc., a New Jersey corporation and a co-packing partner of the Company (" F&S ") and F&S Produce West LLC, a Delaware limited liability company and a wholly-owned subsidiary of F&S (" Buyer "), entered into an Asset Purchase Agreement (the " Asset Purchase Agreement "), whereby the Buyer (i) purchased and acquired from the applicable Seller Parties certain assets of the Seller Parties related to the prepared food business of the Seller Parties and their subsidiaries relating to the processing and packaging of fresh foods, including fresh-cut fruit and vegetables, and prepared foods, including sandwiches, salads, parfaits and ready-to-eat snack items, sold at retail and food service, but excluding the guacamole or other avocado derivative product business (the " RFG Business "), (ii) purchased and acquired from the applicable Seller Parties the RFG Business as a going concern and (iii) assumed certain specified liabilities of the Seller Parties related to the RFG Business as set forth in the Asset Purchase Agreement. Additionally, Buyer assumed leasehold interests in certain real property and related improvements leased by certain of the Seller Parties and used in the RFG Business (the " RFG Leases "), pursuant to leasehold assignment and assumption agreements and related documents between Buyer, the applicable Seller Parties who are the lessees under the RFG Leases and the applicable landlords under the RFG Leases. Concurrently with the transaction contemplated by the Asset Purchase Agreement (the " Transaction "), Mid-Eastern West LLC, a California limited liability company and an affiliate of F&S, entered into a Purchase and Sale Agreement with Force 1730 Eastridge L

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On August 15, 2024, Paul Harrison, the Company's Executive Vice President RFG Prepared, resigned 1 in connection with the transaction contemplated by the Asset Purchase Agreement and Purchase and Sale Agreement in order to accept employment with Buyer.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On August 16, 2024, the Company issued a press release announcing the consummation of the transactions contemplated by the Asset Purchase Agreement and the Purchase and Sale Agreement. A copy of this press release is attached hereto as Exhibit 99.1 and is being furnished with this Current Report on Form 8-K (" Current Report "). The information set forth under Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely pursuant to this Item 7.01. The Company cautions that statements in this report that are not a description of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words referencing future events or circumstances such as "expect," "intend," "plan," "anticipate," "believe," and "will," among others. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon the Company's current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (b) Pro Forma Financial Information The unaudited pro forma condensed consolidated balance sheet as of April 30, 2024, presents the Company's consolidated financial position giving pro forma effect to the transactions contemplated by the Asset Purchase Agreement and the 3 Purchase and Sale Agreement as if they had occurred on April 30, 2024. The unaudited pro forma condensed consolidated statement of income (loss) for the year ended October 31, 2023 presents the Company's consolidated results of operations giving pro forma effect to the Transaction as if it had occurred on November 1, 2022, except that, for purposes of the unaudited pro forma condensed consolidated statements of income (loss) for the years ended October 31, 2023, 2022, and 2021, pro forma effect is given to the presentation of the RFG Business as discontinued operations for each year presented. The unaudited pro forma condensed consolidated balance sheet and statements of income (loss) are filed as Exhibit 99.2 hereto and are incorporated herein by reference. (d) Exhibits. Exhibit No. Description 10.1 Asset Purchase Agreement, dated August 15, 2024.* 10.2 Purchase and Sale Agreement, dated August 15, 2024. 10.3 Amendment to Credit Agreement, dated August 15, 2024 99.1 Press Release dated August 16, 2024. 99.2 Unaudited pro forma condensed consolidated balance sheet as of April 30, 2024, and the unaudited pro forma condensed consolidated statements of operations for the years ended October 31, 2023, 2022, and 2021. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document * Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant will furnish copies of any such schedules and exhibits to the SEC upon request. 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused thi

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