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Mission Produce (AVO) announced last night that it would acquire Calavo Growers (CVGW) in a cash-and-stock transaction for $27/share, valuing Calavo at an enterprise value of roughly $430 mln. CVGW is jumping on the headline premium, while AVO is sliding as the market digests dilution, integration complexity, and the long runway to closing.

• The $27/share price represents a premium of about 26% to CVGW's 30-day volume weighted average price, and is structured as $14.85 in cash plus 0.9790 shares of AVO per share.
• The acquisition is expected to bolster AVO's avocado and fresh produce platform in North America and support broader international growth by adding scale, customers, and a wider sourcing footprint across key supply regions.
• AVO expects its vertically integrated avocado platform to expand into CVGW's added categories like tomatoes and papayas, helping improve year-round network utilization and smooth seasonal avocado swings.
• The deal adds a new leg for AVO by bringing in CVGW's prepared foods platform, including guacamole and other ready-to-eat items; in CVGW's Q4, Prepared segment sales were $18.4 mln, up 20% yr/yr, driven by higher volumes from new customers, expansion with existing accounts, and product launches.
• AVO expects about $25 mln of annualized cost synergies within 18 months post-close, supporting EBITDA growth and cash flow generation over time; the companies expect to close by the end of August 2026.

Briefing.com Analyst Insight

While AVO is paying a pretty premium for CVGW, the strategic rationale is straightforward. The deal adds scale and sourcing depth across North America, further strengthens AVO's vertically integrated model, and importantly brings a larger prepared foods platform that would represent a newer, more diversified earnings lever for AVO. That backdrop is front and center right now. AVO's fiscal Q4 revenue fell 10% yr/yr as per-unit avocado pricing dropped 27% despite higher volumes, and CVGW also noted a late-quarter pricing reset and higher supply weighing on Fresh results. That said, the deal brings new risks around integration and execution, and investors will want to see AVO deliver the targeted $25 mln while proving the combined platform can translate into steadier EBITDA and cash flow through the avocado cycle.