UPDATE 1-Canada’s SunOpta to sell unit for C$68 million

* To sell food distribution assets to United Natural Foods

* Says to use proceeds to repay debt

* Says transaction to be dilutive by C$0.02 to FY earnings

* Transaction expected to close by early June

May 11 (BestGrowthStock) – Canada’s SunOpta Inc (SOY.TO: ) (STKL.O: ),
said it agreed to sell its Canadian food distribution assets to
United Natural Foods Inc (UNFI.O: ) for C$68 million in cash, to
repay debt and focus on its core food manufacturing business.

The transaction is expected to be dilutive by 2 Canadian
cents on SunOpta’s full-year earnings, prior to the expected
gain on the sale, the company — which focuses on organic foods
and natural health products — said in a statement.

Separately, United Natural said the transaction is expected
to be completed by early June, and upon closing, the business
will be operated through a wholly owned subsidiary of United
Natural Foods and will operate in Canada as UNFI Canada.

“This acquisition is the latest step in our strategy to
grow our organic and specialty foods business and represents an
opportunity for UNFI to diversify its operations by entering
into the Canadian market,” UNFI Chief Executive Steve Spinner
said in a statement.

The food distribution assets, which are part of the SunOpta
distribution group (SDG), posted revenue of $169.6 million in
fiscal 2009.

However, SunOpta said it will retain the natural health
products distribution and manufacturing assets, which represent
the balance of the assets in SDG.

SunOpta shares closed at C$4.15 Monday on the Toronto Stock
Exchange, while those of United Natural Foods closed at $30.79
on Nasdaq.
Stock Investing

(Reporting by Arnika Thakur in Bangalore; Editing by
Unnikrishnan Nair)

UPDATE 1-Canada’s SunOpta to sell unit for C$68 million