Limoneira Co. has acquired Yuma, Ariz.-based Marlin Ranching Co. and its lemon packinghouse operations for $1.4 million in cash and stock, a move expected to increase volume for the Santa Paula, Calif., grower-shipper.
The deal also contains a potential earn-out up to $400,000 in cash.
Limoneira plans to use the facilities to wash and pack lemons from Arizona as well as citrus from other growers in the region. The company estimates it will process about 500,000 to 600,000 cartons of fresh lemons annually there.
That would generate about $400,000 to $500,000 in yearly operating income, due to costs saved by not shipping the fruit to Limoneira’s Santa Paula packing facilities plus incremental fruit packing operations.
The Marlin packing assets are near Limoneira’s existing growing operations in Yuma, Limoneira senior vice president Alex Teague said in a news release.
“This acquisition will immediately increase our volume and give us increased flexibility in the export markets,” Teague said. “Importantly, this also gives us the ability to ship Arizona lemons to China. We expect to benefit from improved operating efficiencies from the new packinghouse, particularly during the first quarter of our fiscal year.”
Limoneira also plans to complete an expansion of its Santa Paula packing facilities by next fiscal year.
“The acquisition of Marlin packing operations is in line with our long-term goal to expand our agribusiness,” Harold Edwards, president and chief executive officer, said in the release.