Europe's organic food producer Royal Wessanen NV (KJWNY.PK) on Tuesday said it has started the divestment process of its US subsidiary American Beverage Corp., which was termed non-core previously. The sale is in line with its strategy to focus on organic food in Europe with the clear vision to make its organic brands most desired in Europe.
Wessanen expects the divestment to finalize in the fourth quarter of the year, while it will reported as 'discontinued operations' as of the second quarter 2012. The process is being managed by Moelis & Co.
The proceeds from the sale will be primarily used to further grow European activities, both autonomously and via add-on acquisitions, while maintaining a conservative capital structure, the company said in its statement.
Founded as Daily Orange Juice Co., Inc. in 1960, American Beverage began as manufacturer of orange juice products in the Pittsburgh suburb of Verona.
In September last year, Wessanen had postponed the previously planned divestment process of diversified beverage company American Beverages, citing strong performance at the unit. The company then said it believed that a divestment at that point in time would not unlock the full value of the business for shareholders.
The company noted that the American Beverage management has done a great job in turning around the company over the last few years.
The unit is growing with drastic improvement in multiple processes in areas such as production, supply chain, sales, marketing and finance, benefiting from expanded distribution, significantly higher marketing investments and brand activation, the company noted.
In Amsterdam, Wessanen shares closed its trading on Monday at 2.24 euros.
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