The sale includes some raw materials, work-in-process and finished goods inventories, the Northland, Treesweet and Awake brands, and an assignment of the Seneca brand license agreement between Northland and Seneca Foods Corporation, according to Northland.
Apple & Eve paid Northland a cash payment approaching $10.8 million, with both companies entering into a cranberry concentrate supply agreement under which Apple & Eve will purchase approximately $6.7 million of cranberry concentrate during the next 12 months. This agreement also provides Apple & Eve with the option - commencing in October 2005 and continuing for nine years - of purchasing cranberry concentrate from Northland for use in its newly acquired brands.
John Swendrowski, chief executive officer of Northland, attributed the sale to the need to enhace shareholder value in a strongly competitive shelf-stable juice market.
"Unfortunately, the transaction will impact the future of approximately 35 jobs in Wisconsin Rapids as we move the business to Apple & Eve over the next 60 days," he added.
Last September, Northland entered into a $28 million purchase-and-sale agreement with co-operative Ocean Spray, allowing the latter to buy its rival's 172,000-square-foot cranberry receiving and concentrate manufacturing plant, as well as its adjacent office building, and the company's existing inventory of frozen, unprocessed cranberries.
Northland, however, retained control of its brand and retail juice business.
In addition, Ocean Spray paid Northland $5 million to secure first option on the purchase of 14 Northland-owned cranberry marshes in Wisconsin, leaving three cranberry properties in the hands of Northland. Ocean Spray and its grower-owners have 180 days to exercise the option of buying those acres at a set price.