Limoneira CEO says company isn’t looking to move
Santa Paula-based Limoneira is unlikely to leave the area if it sells some or all of the company as part of its strategic review, CEO Harold Edwards told the Business Times.
“I just don’t see it,” he said during a Dec. 11 interview. “This isn’t about us leaving. This is about us figuring out how to get better value for our shareholders while we stay.
“It would be hard to move 4,000 acres of land, right?” he said, referring to the 130-year-old company’s land holdings in the area.
Limoneira announced Dec. 1 that it’s exploring a sale, merger, acquisition or buyout that would take the company private to maximize value for its stockholders.
Founded in 1893, Limoneira is a producer of lemons, avocados and other crops with 11,100 acres of agricultural lands, real estate properties, and water rights in California, Arizona, Chile and Argentina.
It employs about 350 people, most from the Santa Paula area, where it operates a large packing house and maintains its headquarters.
Limoneira went public in 2010 when the family-owned enterprise had too many shareholders to remain private.
The company’s current market capitalization is $324.5 million as of Dec. 13 and it assets are projected to be between $550 million and $700 million, according to its investor disclosure. While currently a micro-cap stock with market value under $350 million, unlocking the value of its land and other holdings could handsomely reward shareholders.
Edwards said that about 18 months ago, the company was “going through a really challenging period because of the pandemic.”
Seventy percent of lemons are consumed at restaurants and bars, which were hit hard by the pandemic, he said.
Thus, since then, Limoneira has “developed a strategic roadmap intended to enhance near and long-term shareholder value,” the company’s board chair, Scott Slater, said in a press release.
Slater said the company considers itself to be in a strong financial position, having recently reduced its net debt position and rightsized the balance sheet through its ongoing strategic shift towards an asset-lighter business model.
“Given the board’s belief that there is a disconnect between Limoneira’s public market value and the intrinsic value of our company’s underlying assets, the board believes it is the right time to explore all strategic options to prioritize the company’s growth and stockholder value,” Slater said.
The company’s stock price has increased by about 20% since its Dec. 1 announcement.
It opened the day of the statement at $15.30.
It closed Dec. 12 at $18.24.
Limoneira’s board has retained Arkansas-based Stephens Inc. as its financial advisor and law firm Squire Patton Boggs (US) LLP as its legal advisor to assist with the exploration of alternatives.
Slater said the board has not set a timetable for the conclusion of the process and there is no assurance that it will result in any transaction or other strategic change or outcome.
Edwards said that the company has long had deep ties to the Santa Paula community — not only employees but also developments such as the Harvest at Limoneira housing project.
Given that, he said, “Whatever we do, we’ll do it with the best interest of the community in mind which we view through a lens of stewardship.”
Even so, Edwards said, the Limoneira board and management “will try to figure out what’s the best thing for the long-term of the company.”
Bruce Stenslie, president/CEO of the Economic Development Collaborative, a Camarillo-based business consulting nonprofit on whose board Edwards sits, doubts Limoneira will leave the area if it’s bought or merges with another company.
“There’s always the risk when you start looking at different models of ownership, but I don’t think there’s any reason to be overly concerned,” he said.
“I trust the leadership at Limoneira to find a way to remain committed to the Ventura County region given its value to the area,” he said.
Miguel Delgado Helleseter, director of the Institute for Global Economic Research at CSU Channel Islands, agrees.
“My sense is that unless new ownership wanted to take the company in a completely different direction, it would be hard to imagine them reducing their footprint in Ventura County,” he said.
Korinne Bell, Ventura County Agricultural Commissioner, said it would be a significant loss to the local agriculture industry if Limoneira ceased operations and left.
“They’re one of our major packing houses and a mainstay in the industry which supports a lot of our agricultural workers,” she said.
“I think the loss of Limoneira would be a big blow to this county,” Bell said.
Limoneira’s anchors — avocados and lemons — are two of Ventura County’s biggest crops.
In 2022, avocados in the county had a value of roughly $245 million, while lemons had a value of about $207 million, according to the Ventura County Civic Alliance’s 2023State of the Region report.
Santa Paula Mayor Leslie Cornejo said she’s confident that Limoneira’s commitment to the area will continue no matter what direction the company takes.
“We really do hope that it will continue to benefit us and I believe that it will,” she said.
Edwards said the Dec. 1 announcement has spurred considerable interest in the company.
“It’s brought a lot of interested parties to the table to begin this discussion of what could be as Limoneira moves forward,” he said.