Calavo Growers to sell its 50% stake in produce distributor Maui Fresh International to San Rafael Distributing for US$2.6M; Calavo will gain about US$600,000 from sale, according to SEC filing
November 8, 2012
– On October 31, 2012, Calavo Growers, Inc. a California corporation ("Calavo," "our," or "the Company"), entered into a Sale of LLC Interest Agreement (the "Sale Agreement") with San Rafael Distributing, Inc., an Arizona corporation ("San Rafael"), pursuant to which the Company has agreed to sell to San Rafael all of our interest, representing one-half ownership, in Maui Fresh International, LLC, a California limited liability company ("Maui") for $2.6 million. This transaction resulted in a gain on sale of approximately $0.6 million.
Since 2006, Calavo and San Rafael both had a 50% interest in the joint venture of Maui for the purpose of the marketing, sale and distribution of fresh produce from the Los Angeles Wholesale Produce Market.
Pursuant to the Sale of LLC Interest Agreement, San Rafael made an initial down payment of $0.3 million on October 31, 2012. Concurrently, San Rafeal also entered into two promissory notes, the "Equity Promissory Note" and the "Goodwill Promissory Note." The equity promissory note of $1.0 million and the goodwill promissory note of $1.3 million have been secured by a pledge by San Rafael's entire ownership interest on Maui and were guaranteed by Francisco Clouthier (owner of San Rafael).
The Equity Promissory Note, totaling approximately $1.0 million, will be paid in 36 equal monthly principal payments of $27,542 together with interest accrued, as defined, on the unpaid principal balance. The entire amount of principal and all accrued unpaid interest shall be due and payable on November 1, 2015.
The Goodwill Promissory Note, totaling $1.3 million, is due and payable in full on November 1, 2017.
Item 9.01 Financial Statements and Exhibits.
10.1 Sale of LLC Interest Agreement dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.
10.2 Equity Secured Promissory Note dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.
10.3 Goodwill Secured Promissory Note dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.
10.4 Pledge and Security Agreement dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.
10.5 Personal Guaranty dated October 31, 2012 between Calavo Growers, Inc. and Francisco Clouthier.