RICHMOND, Va., Sept. 7, 2021 /PRNewswire/ -- Universal
Corporation (NYSE: UVV) today announced that it has entered into a
definitive agreement to acquire Shank's Extracts, Inc. ("Shank's"),
a privately-held, specialty ingredient, flavoring and food company
with bottling and packaging capabilities. Following the close of
the transaction, Shank's will operate as part of Universal's
plant-based ingredients platform, which includes Silva
International, Inc. ("Silva") and FruitSmart, Inc.
("FruitSmart").
Founded in 1899, Shank's has established a strong presence
within the flavoring, extracts and bottling marketplace, with
significant vanilla expertise. In addition to pure vanilla extract
products, Shank's offers a robust portfolio of over 2,400 other
extracts, distillates, natural flavors and colors for industrial
and private label customers worldwide. Headquartered in
Lancaster, Pennsylvania, Shank's
employs more than 200 people and has a 191,000 square foot
manufacturing campus.
"This agreement with Shank's marks another important step
forward in Universal's efforts to identify and execute on
opportunities that broaden and enhance our plant-based ingredients
platform," said George C. Freeman,
III, Chairman, President and Chief Executive Officer of
Universal Corporation. "The Shank's acquisition fits squarely in
our new platform and our capital allocation strategy, bolstering
our offerings for customers and expanding our value-added services
by adding flavors, custom packaging and bottling, and product
development capabilities."
"As the domestic natural food flavors market continues to
accelerate, we are pleased to be able to expand our customer
proposition with Shank's portfolio of high-quality botanical
extracts," continued Mr. Freeman. "Shank's shares our commitment to
food safety, as reflected in its continued investment in equipment,
facilities, and its highly trained and certified employees. We look
forward to welcoming Shank's impressive team to Universal as we
leverage our companies' combined 200 years-plus of history to bring
the business into a new phase of growth."
"Shank's has been providing high-quality products and services
for more than 120 years, earning a reputation for consistency,
traceability and dependability. This has allowed us to build a
strong portfolio of long-tenured, blue-chip customers. As part of
Universal Corporation, Shank's will benefit from the resources and
scale of a global organization as we look to expand our offerings
and enter new, lucrative end markets," said Jeffrey Lehman, President-owner of Shank's.
Shank's integrated manufacturing operations allow it to produce,
package and deliver its final product consistently and dependably,
in customers' preferred packaging. Boasting decades-long working
relationships with its sourcing partners, Shank's has a secure
supply chain with global traceability that protects its strong
position in the fast-growing specialty flavorings market.
Universal Corporation expects the transaction to close in
calendar-year fourth quarter, subject to customary closing
conditions, and anticipates the acquisition will be accretive to
earnings in fiscal year 2023. Following the close of the
transaction, the existing management team will continue to run the
business and report to J. Patrick
O'Keefe, Senior Vice President of Universal Global Ventures,
Inc.
Universal Corporation expects to fund the transaction with cash
on hand and borrowings under its committed revolving credit
facility. The Company remains committed to increasing its quarterly
dividend on an annual basis, as it has done for 51 consecutive
years.
Advisors
Troutman Pepper Hamilton Sanders LLP acted
as legal counsel to Universal Corporation. SC&H Capital acted
as financial advisor to Shank's, and Cozen O'Connor P.C. acted as
legal counsel.
About Universal Corporation
Universal Corporation
(NYSE: UVV), headquartered in Richmond,
Virginia, is a global business-to-business agri-products
supplier to consumer product manufacturers, operating in over 30
countries on five continents, that sources and processes leaf
tobacco and plant-based ingredients. Tobacco has been the Company's
principal focus since its founding in 1918, and Universal is the
leading global leaf tobacco supplier. Through the Company's
plant-based ingredients platform, it provides a variety of
value-added manufacturing processes to produce high-quality,
specialty vegetable- and fruit-based ingredients for the food and
beverage end markets. Universal has been finding innovative
solutions to serve its customers and meet their agri-product needs
for more than 100 years. The Company's revenues for the fiscal year
ended March 31, 2021, were
$2.0 billion. Visit
www.universalcorp.com for more information on Universal Corporation
and the latest Company news.
Forward Looking Statements
This release includes
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
"anticipate," "assume," "estimate," "expect," "target" "project,"
"predict," "intend," "plan," "believe," "potential," "may,"
"should," "would" and similar expressions may identify forward
looking information. Forward-looking information in these materials
includes, but is not limited to: the acquisition of Shank's; the
expected closing of the Shank's acquisition; and contributions to
future earnings. The Company cautions readers that any
statements contained herein regarding financial condition, results
of operation, and future business plans, operations, opportunities,
and prospects for its performance are forward-looking statements
based upon management's current knowledge and assumptions about
future events, and involve risks and uncertainties that could cause
actual results, performance, or achievements to be materially
different from any anticipated results, prospects, performance, or
achievements expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to, impacts of the ongoing COVID-19 pandemic; success in
pursuing strategic investments or acquisitions and integration of
new businesses and the impact of these new businesses on future
results; product purchased not meeting quality and quantity
requirements; reliance on a few large customers; its ability to
maintain effective information technology systems and safeguard
confidential information; anticipated levels of demand for and
supply of its products and services; costs incurred in providing
these products and services; timing of shipments to customers;
changes in market structure; government regulation and other
stakeholder expectations; product taxation; industry consolidation
and evolution; changes in exchange rates and interest rates;
impacts of regulation and litigation on its customers;
industry-specific risks related to its plant-based ingredient
businesses; exposure to certain regulatory and financial risks
related to climate change; changes in estimates and assumptions
underlying its critical accounting policies; the promulgation and
adoption of new accounting standards, new government regulations
and interpretation of existing standards and regulations; and
general economic, political, market, and weather conditions. Actual
results, therefore, could vary from those expected. A further list
and description of these risks, uncertainties, and other factors
can be found in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2021, and
in other documents the Company files with the Securities and
Exchange Commission. This information should be read in conjunction
with the Annual Report on Form 10-K for the years ended
March 31, 2021. The Company
cautions investors not to place undue reliance on any
forward-looking statements as these statements speak only as of the
date when made, and it undertakes no obligation to update any
forward-looking statements made.
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SOURCE Universal Corporation