Universal expands plant-based ingredients platform with Silva acquisition

  • 14 September 2020
  • M&A
The global leaf tobacco supplier has agreed to pay $170 million in cash for the privately-held veg, fruit, and herb processing company
Concept photo of investors merging two pieces of a puzzle

Universal Corporation is to acquire Silva International, a privately-held, natural, speciality dehydrated vegetable, fruit and herb processing company, for $170 million in cash. Universal, which sources, processes, and supplies agri-products, is a global leaf tobacco supplier.

Following the close of the transaction, Silva will operate as part of Universal’s plant-based ingredients platform, which includes FruitSmart and Carolina Innovative Food Ingredients, CIFI.

“We’re excited to have reached this agreement with Silva as we continue to diversify our offerings and generate new opportunities for value creation,” said George Freeman, chief executive of Universal Corporation.

Freeman continued: “With this acquisition, we expect these businesses to represent 10% to 20% of our EBITDA by fiscal year 2022, ahead of our previously stated target outlined as part of our capital allocation strategy.”

Founded in 1979, Silva procures over 60 types of dehydrated vegetables, fruits and herbs from over 20 countries around the world.

Silva, FruitSmart, and CIFI all serve similar industries but have different product portfolios and minimal customer overlap.

“We expect to leverage significant commercial synergies between these businesses, and we are excited by the prospect of leveraging Universal’s global network of hundreds of thousands of farmers to drive growth across the platform,” explained Freeman.

As well as sourcing, the company specialises in processing natural raw materials into custom-designed dehydrated vegetable- and fruit-based ingredients for a variety of end products.

Headquartered in Momence, Illinois, Silva employs over 200 people and has a 380,000 square foot manufacturing facility.

“For more than 40 years, Silva has consistently produced flavorful, high-quality, natural speciality ingredients to meet our customers’ specifications. By joining Universal, we will be able to take advantage of opportunities for collaboration and growth while remaining true to our culture and our mission,” said Heinz-Peter Schmidt, majority owner and chief executive of Silva.

Following the close of the transaction, Kent DeVries, President of Silva, will continue to run the business and report to Patrick O’Keefe, senior vice president of Universal Global Ventures.

Harris Williams acted as exclusive financial advisor to Universal Corporation, and Troutman Pepper Hamilton Sanders as legal counsel.

Houlihan Lokey acted as exclusive financial advisor to Silva. Winston & Strawn and Torsten Steinhaus, Senior Partner of Steinhaus Prof. Dr Griesar in Frankfurt, Germany, acted as legal counsel.

Universal expects the transaction to close in October this year.