SunOpta has sold its sunflower seeds business for $16 million as the Eden Prairie-based food manufacturer continues to narrow its focus on plant-based milks and fruit products.
The business, which represents less than 10% of SunOpta's $886 million in revenue over the past 12 months, consists of hulling and roasting sunflower seeds at three facilities: Breckenridge and Crookston, Minn., and Grace City, N.D.
California-based private equity firm Pacific Avenue Capital Partners closed on the purchase on Tuesday and will rename the business Sunrich Products. No changes to employment or management are expected as a result of the sale, SunOpta said.
SunOpta CEO Joe Ennen said in a statement the divestiture is about "focusing on high-growth, high-return opportunities."
The company has undertaken a significant reorganization in recent years, and its sunflower seeds business is a vestige of its former identity. Previously known as a commodities trader in the natural and organic food space, it shed its global ingredients business two years ago, which accounted for nearly half its revenue — a dramatic step in its multiyear turnaround plan.
SunOpta aims to double its plant-based business by 2025 and has invested heavily in the plant-based milk space to make that happen.
Last week, the company broke ground on a $31 million warehouse in Alexandria, Minn. to expand production of oat milk and other plant-based milks at its two manufacturing facilities in the area. A massive plant-based milk production facility in Texas is on track to open later this year.
The company said in a news release Thursday it will be "fully focused on offering a broad line of plant-based beverages utilizing oat, almond, rice, soy, coconut, hemp and other bases, as well as broths, teas, nutritional beverages and liquid and powder ingredients."
SunOpta primarily manufactures for other companies — including store brands for major retailers — but has several of its own lines of plant-based milks, including West Life and Dream.
SunOpta will record a $16 million after-tax loss on the sale due to the difference between the sale price and the book value of the business. More details are expected when quarterly results are announced next month.
