TreeSweet to Be Purchased by Texas Investors
Di Giorgio Corp. has agreed to sell its 50-year-old citrus juice subsidiary, TreeSweet Products Co. of Santa Ana, to unidentified Texas investors for about $31 million, company officials said Wednesday.
Peter F. Scott, chairman of San Francisco-based Di Giorgio, which bought TreeSweet in 1958, said the sale is part of a major restructuring that will provide additional funds for investment in some of the company’s other, more profitable businesses.
Scott, who would not disclose the buyers’ identity, said he does not expect the new owners to move TreeSweet’s headquarters from Santa Ana or lay off any of that facility’s 100 permanent employees. He said the new buyers were “emphatic” about not being identified until the deal is closed. Bernard Conroy, president of TreeSweet, described the buyers as “at least two” individuals based in Texas.
TreeSweet operates citrus fruit processing and packaging plants in Coachella, Calif., and Fort Pierce, Fla. It employs a total of 450 workers during the peak season.
Conroy said Di Giorgio’s decision to sell the company was prompted by a series of freezes in Florida’s citrus crop from 1979 to 1983, and an increasingly competitive citrus market.
“I’ve known for quite some time that the company (TreeSweet) has been evaluated by potential buyers, “ Conroy said.
Scott added that as a result of the increased competition, “Di Giorgio has not earned an adequate return on its investment in TreeSweet.”
Under terms of the agreement, Scott said, Di Giorgio will receive $1.3 million in cash and a note for about $30 million for TreeSweet, which had $100 million in sales in 1984.
The company estimated that the TreeSweet sale will result in an after-tax loss of approximately $2.9 million, or 48 cents per share, which, Scott said, “will be reflected in 1984 results.”
Di Giorgio, which had about $1.2 billion in sales in 1984, processes and markets food products for the restaurant industry and distributes grocery, pharmaceutical, personal care and consumer electronic products. It also markets building materials and develops land resources.
