Calavo Growers Inc. (CVGW) shares jumped 12.93% in after-hours trading to $25.50, and the reason is pretty straightforward: the company announced it's getting acquired while simultaneously posting solid fiscal year results. Not a bad combo.
The Merger Math
Calavo Growers struck a definitive merger agreement with California-based Mission Produce Inc. (AVO), which will acquire the company for $27 per share. That valuation is based on Mission's 30-day volume-weighted average price ending January 13.
Here's how the deal breaks down: Calavo shareholders will receive $14.85 in cash plus 0.9790 shares of Mission stock for each share they own. It's a mixed consideration deal, giving shareholders both immediate cash and a stake in the combined entity.
Once everything closes, Mission Produce shareholders will control about 80.3% of the combined company, while Calavo shareholders will own roughly 19.7%. The companies expect to squeeze out $25 million in cost synergies from the combination, and they're targeting an August closing date, assuming they get the necessary regulatory approvals and shareholder votes.
Strong Fiscal Year Performance
The merger news came alongside Calavo's fiscal 2025 results, which actually look pretty good. For the full fiscal year ended October 31, 2025, the company reported net income from continuing operations of $20 million, up a whopping 192% from $6.8 million in fiscal 2024.
Adjusted net income from continuing operations climbed 42% to $28.9 million, or $1.62 per diluted share. Adjusted EBITDA from continuing operations rose 12% to $40.8 million from $36.5 million the prior year.
The one soft spot? Total net sales dipped to $648.4 million from $661.5 million. So revenue declined slightly, but the company managed to extract significantly more profit from what it did sell.