Village Farms to privatize certain assets of Fresh Produce segment

Village Farms (VFF) has entered into a definitive agreement with a newly-formed holding company, Vanguard Food, backed by private investment firms including Sweat Equities, to privatize certain assets and operations of its Fresh Produce segment. The transaction will create a new, privately held joint venture with Village Farms as a minority owner, simultaneously enabling the company to focus on its international business and repositioning its fresh produce business independently with new strategic capital partners. The parties have agreed to appoint Sweat Equities founder Charlie Sweat as Chairman of Vanguard’s Board of Managers. Sweat is the former CEO of Earthbound Farm, organic foods company that grew to over $540M in annual sales during his 15-year tenure. Village Farms CEO Michael DeGiglio has also been appointed to Vanguard’s Board of Managers and will serve as Interim CEO of Vanguard until a permanent replacement has been identified. Village Farms CFO Steve Ruffini will also serve on Vanguard’s Board. Village Farms will privatize its Texas-based, 40-acre Marfa II and 40-acre Fort Davis greenhouse assets, all of its produce-related intellectual property, with the exception of the Village Farms name, and transfer all of its produce distribution facilities, employees and operational control of these facilities to Vanguard. The transaction is expected to close during Q2. Consideration paid to Village Farms in the transaction will include 37.9% of the initial common equity units of Vanguard, and $40M in cash. Village Farms will have no future cash obligations to Vanguard, and pre-emptive rights to maintain its ownership interest. Vanguard will remain a private company with access to additional capital to execute a M&A roll-up strategy. Upon completion of the transaction, Village Farms will continue to own its 30-acre Monahans greenhouse facility in Texas, and will own and lease its 20-acre Marfa I greenhouse facility in Texas to Vanguard. In Canada, Village Farms will continue to own and operate its 60-acre Delta 1 greenhouse, 25-acre Delta 2 greenhouse, and 25-acre Delta 3 greenhouse. Village Farms will enter into service and supply agreements with Vanguard for fresh produce production in Delta, which will continue supplying produce for Vanguard for a multi-year term. The Delta 1 greenhouse generated approximately $25M in fresh produce sales in FY24.