MINNEAPOLIS--(BUSINESS WIRE)-- SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL) (TSX:SOY), a leading company focused on plant-based foods and beverages and fruit-based foods and beverages, today announced completion of the sale of the Company’s global ingredients segment and related assets to Amsterdam based global commodity trading company, Amsterdam Commodities N.V. (Euronext: ACOMO) for cash and debt free consideration of €330 million. The transaction closed on December 30, 2020.
“I’m pleased to announce the completion of this strategically transformational divestiture. This transaction further solidifies SunOpta’s future direction as a high-growth, plant-based company focused on providing value-added products in competitively advantaged categories with consistent, sustainable, above average growth characteristics. This transaction significantly de-levers and strengthens SunOpta’s balance sheet, enabling the acceleration of expansion plans in our fast-growing plant-based food and beverage segment. The plans include both high-return capital investment projects, as well as synergistic acquisitions that add to an existing set of strong capabilities in our core plant-based beverage platform. This is a very exciting time for us at SunOpta as we look forward to building on our successes,” said Joe Ennen, Chief Executive Officer of SunOpta.
On December 31, 2020, SunOpta entered into a five-year credit agreement for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $250 million, subject to borrowing base capacity. In addition, as part of the same facility, the lenders provided a five-year, $75 million delayed draw term loan, to be used for capital expenditures. The delayed draw term loan can be borrowed within 18 months from closing. This new credit facility with decreased interest rates replaces SunOpta's previous facility that was set to expire on March 31, 2022. The new credit facility will be used to support the working capital, capital expenditures, and general corporate needs of SunOpta’s operations, in addition to funding future strategic initiatives. Borrowings under the revolving credit facility and delayed draw term loan bear interest based on various reference rates including LIBOR plus an applicable margin. The applicable margin on the new revolving facility ranges from 1.50% to 2.00% for loans bearing interest based on LIBOR with a 0.25% step down in the margin when the Company’s total leverage ratio is below an agreed threshold. The applicable margin on the term loan ranges from 2.25% to 2.75%. The applicable margins are set quarterly based on average borrowing availability. The obligations of the borrowers under the facility are guaranteed by substantially all of SunOpta’s subsidiaries and, subject to certain exceptions, such obligations are secured by first priority liens on substantially all assets of SunOpta and the other borrowers and guarantors. The credit facility contains customary covenants and borrowing availability requirements. The facility is provided by a syndicate of banks, including Bank of America, N.A., JP Morgan Chase Bank, N.A., Rabobank Nederland, Canadian Branch, Bank of Montreal, and Wells Fargo Bank, National Association.
On December 31, 2020, SunOpta also retired in full its 9.5%, $223.5 million second lien notes due in October 2022. The retirement of the second lien notes reduces interest expense by approximately $21 million on an annual basis. In total, debt was reduced by approximately $355 million between the payoff of the second lien notes and paydowns of the existing credit facility on December 31, 2020.
Interest expense, on an annualized basis, would decrease from approximately $29 million to approximately $4 million based on the weighted-average interest rates as at September 26, 2020.
“We are pleased with the extension of the credit facility and appreciate the support of our banking partners as we continue to execute our strategic plans to deliver strong performance,” said Scott Huckins, Chief Financial Officer of SunOpta. “The new credit facility provides enhanced flexibility and increased liquidity to support our operational initiatives and growth objectives. The delayed draw term loan is a very cost-effective tool to continue to invest in and grow our plant-based beverage platform.”
About SunOpta Inc.
SunOpta Inc. is a leading company specializing in the sourcing, processing and production of organic, natural and non-GMO plant- and fruit-based food and beverage products.