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FORT MYERS — Agribusiness firm Alico says it will become the nation's largest citrus producer after it completes the acquisitions of three rival citrus producers in Florida for a total of $363 million.
Alico has already acquired two producers: Orange-Co on Dec. 2 and Gator Grove on Sept. 23. Another acquisition, Silver Nip Citrus, is expected to close in the first quarter. In total, Fort Myers-based Alico will own 32,600 acres of citrus groves, up from 10,900 acres, resulting in a 189% increase in production.
The biggest acquisition is Orange-Co's 20,263 acres, which comprises one of the largest contiguous citrus grove properties in Florida. The $274 million Orange-Co acquisition was financed with proceeds from Alico's recently announced $97 million sale of its sugarcane assets and a portion of the proceeds from Alico's new long-term debt and credit lines.
“These transactions are transformative for our citrus business and represent a major step forward in our strategy to become a leading agriculture and natural resources company by identifying and executing on accretive growth opportunities,” says Clay Wilson, the CEO of Alico, in a statement. “We intend to continue to target attractive markets and establish leading positions in our different business lines where scale and expertise can generate strong returns for our investors.”
The acquisitions, based on 2014 performance, would have increased Alico's adjusted earnings from $21 million to approximately $58 million. Cost savings as a result of the acquisitions will add about $5 million in earnings annually, the company says.
Raymond James was Alico's financial advisor and provided a fairness opinion to the company with respect to the Orange-Co acquisition. Wachtell, Lipton, Rosen & Katz served as legal counsel to the company on the Orange-Co and Silver Nip Citrus acquisitions. Houlihan Lokey provided a fairness opinion to a special committee of disinterested members of the board of Alico in connection with the Silver Nip Citrus acquisition.
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