Fyffes acquires Canada’s largest mushroom business for CAD$145m (€98m)

Company Press Release

Fyffes plc is pleased to announce the purchase of Canadian mushroom producer Highline Produce Limited (‘Highline’). Fyffes has paid CAD$145m (€98m) to acquire 100% of the equity in Highline and refinance its existing debt. Fyffes is funding this acquisition through new and existing bank debt.

Highline is a fully integrated mushroom business operating from five facilities, of which four are owned and one is leased. It is the largest operator in the mushroom category in Canada, with retail customers accounting for c.75% of sales, and wholesale, food service and canning customers accounting for the balance. US customers represent c.35% of current annual revenues. Highline’s experienced management team, led by CEO Glenn Martin, will continue to run the business.

Fyffes has based its CAD$145m valuation of Highline on an 8.1 times multiple of its estimated current annualised pro-forma EBITDA of CAD$18m. Fyffes net debt after this acquisition will be less than 2.5 times EBITDA, based on Fyffes current target EBITDA range for 2016 and Highline’s pro-forma annualised EBITDA above. It is anticipated that this multiple will reduce to below 2 times within 2 years based on the expected cash flows of both businesses. The estimated book value of Highline’s net assets amounts to CAD$52m on a debt free basis. This significant transaction will be immediately accretive for Fyffes, resulting in a c.13% increase in its current 2016 target Adjusted EPS range on an annualised basis.

Commenting on this transaction, Fyffes Chairman David McCann said:

“Highline is a very fine business with a strong position in an important product category. We look forward to working with Glenn Martin and his management team to continue to develop the business. This transaction fits perfectly with Fyffes strategic objective of adding an additional product to its existing three through the acquisition of an established, successful, integrated operator in a category with significant scale.”

Highline CEO Glenn Martin said:

“We are excited about this transaction and delighted to be joining Fyffes, given its long history and successful track record of growth. We look forward to working with Fyffes management as we continue to grow our own business into the future.”

For further information, please contact:

Brian Bell, Wilson Hartnell PR – Tel: +353 1 669 0030

Ivan Murphy, Davy Corporate Finance – Tel: +353 1 679 6363