Mission Produce (AVO) M&A announcement summary

Deal rationale and strategic fit

• Combines two leading fresh produce companies to create a premier North American avocado and fresh produce platform with global reach.

• Expands product portfolio into tomatoes, papayas, guacamole, and high-growth prepared foods, enhancing year-round sourcing and offerings.

• Strengthens vertical integration across sourcing, packing, ripening, logistics, and distribution.

• Enhances supply reliability and sourcing security through combined grower networks and expanded packing/distribution, especially in Mexico and California.

• Supports growth in core U.S. and international markets, leveraging a robust global network.

Financial terms and conditions

• Calavo shareholders receive $27 per share: $14.85 in cash and 0.9790 Mission shares per Calavo share.

• Transaction values Calavo at approximately $430 million, a 26% premium to its 30-day average price.

• Mission shareholders will own about 80.3% and Calavo shareholders about 19.7% of the combined company.

• Consideration is 55% cash and 45% stock, with cash funded by amended Mission debt facilities.

• Termination fees set at 3.5% ($15.02mm) and 3.0% ($12.87mm) of enterprise value.

Synergies and expected cost savings

• Identified $25 million in annualized cost synergies within 18 months post-close, with meaningful upside potential.

• Synergies expected from SG&A optimization, streamlining organization, optimizing distribution, and leveraging sourcing best practices.

• Synergies anticipated to drive EBITDA growth and cash flow generation.

• Total cost to achieve synergies estimated at 1.25x run-rate, realized within two years.

• Additional upside expected from revenue synergies and operational efficiencies.