Arable seals California deal, plans merger to boost sliced fruit portfolio

Food and agriculture-focused private investment firm Arable Capital Partners has acquired California-based fruit processor Farmington Fresh Cuts for an undisclosed price.

Established in 1995 and located near the Stockton Municipal Airport, Farmington Fresh Cuts processes fresh sliced apples, oranges, pears and other fruits. It offers four varieties of sliced apples sold in three sizes to bulk and individual customers in the school, food service and retail segments.

Bellevue, Washington-headquartered Arable used capital from its debut fund, Arable Capital, which closed on $300 million in August with a single commitment from the
$129 billion Washington State Investment Board. The vehicle’s strategy calls for long-term hold periods on investments into midstream assets related to specialty crop and tree fruit industries.

Arable plans to merge Farmington with Fresh Innovations, a provider of sliced apples headquartered in Oxnard, California that the firm acquired in April. Alpine Pacific Capital participated in the Farmington deal as minority investor, as was the case with Arable’s Fresh Innovations acquisition.

In April, Arable also acquired Hydratec, an irrigation business headquartered in California, for an undisclosed sum.

Migrating to midstream

Fresh Innovations president Toby Cohen said that the merger with Farmington would help accelerate the company’s growth plans.

“My management team has identified numerous ways to translate Fresh Innovations’ best practices into the Farmington business,” Cohen said.

Arable Capital declined to specify the best practices well-suited for application at Farmington. Fresh Innovations representatives did not reply to messages seeking further detail by the time of publication.

Adam Woiblet, president and designated broker at Walla Walla, Washington-headquartered Agribusiness Trading Group – which merged with Peoples Company last month – told Agri Investor that Arable’s recent processing acquisitions have come amid a surge of investor interest in the region’s midstream assets over the past year or two.

“I haven’t seen a huge uptick in actual transactions that have closed,” Woiblet explained. “I have, however, been contacted by a few different investment companies that have been set up to invest in the midstream sector on the produce side.”

Many such investors, Woiblet said, have expressed interest specifically in opportunities to purchase existing packing or processing assets that are well-suited for equity investments to add value-add components, such as the capacity to process organic produce or extend the shelf-life of ready-to-eat offerings, including sliced apples and pears.