Cincinnati-based Chiquita Brands International Inc. announced Feb. 23 that it has entered into a definitive agreement to acquire the Fresh Express unit of Richmond, VA-based Performance Food Group for $855 million in cash.

The move marks the latest " and largest " development in Chiquita?s resurgence after its 2001 bankruptcy filing. In March 2002, the company announced that it had emerged from its pre-arranged Chapter 11 restructuring "as a healthy company with a solid financial structure."

Subsequent to that announcement, Chiquita pared its operations to eliminate its non-core business involvement, including its interest in Florida citrus with the September 2003 divestiture of The Packers of Indian River in Fort Pierce, FL.

Chiquita, which made its name as a banana marketer, first entered the fresh-cut produce segment in August 2003 when it announced that it would unveil a line of fresh-cut fruit products, which was introduced two months later at the Produce Marketing Association convention. The line was comprised of 24 different cut-product items consisting of single-serve, multi-serve, family packs and party trays.

With the acquisition of Salinas, CA-based Fresh Express, which owns a 40 percent retail marketshare of packaged salads generating $1 billion in annual revenues, Chiquita will immediately become the leader in the fast-growing value-added salads category.

?I believe this is the most important strategic and transformational move the company has made in decades," Fernando Aguirre, chairman and chief executive officer of Chiquita Brands International, said in a statement. "Fresh Express fits seamlessly into our sustainable growth strategy to become a world-class, consumer-driven leader of branded produce by building a high-performance organization, strengthening our core business and, most importantly, pursuing profitable growth."

Mr. Aguirre added that the Fresh Express acquisition will help Chiquita diversify and improve the quality of its earnings. The combined company will become much more balanced, as Europe and North America will generate 55 percent and 44 percent of total revenues, respectively; today, 72 percent of Chiquita?s revenues come from Europe. "With a more balanced mix of earnings between Europe and North America and less dependence on bananas, we will be less susceptible to the risks inherent in our European business, such as pending changes to the E.U. banana import regime and foreign exchange," he said.

?In addition to diversifying earnings, this transaction should accelerate our path to profitable growth, creating a unique opportunity to cross-sell our existing products, leveraging the excellent retail customer relationships of both companies and the foodservice expertise of Fresh Express," added Mr. Aguirre. "By acquiring an established national infrastructure and state-of-the-art technology, we gain immediate scale and an effective platform to launch new products throughout North America, including the ability to accelerate national distribution of fresh-cut fruit.

?I've been extremely impressed with the experience and depth of the Fresh Express management team, including many who helped invent the value-added salad category," he continued.

Chiquita expects the Fresh Express business to continue to be based in Salinas, CA. The company plans to promptly convert all fruit-based products to the "Chiquita? brand and retain the "Fresh Express? brand for value-added salads.

PFG, which purchased Fresh Express in 2001 for about $290 million, said that it will focus entirely on its core broadline and customized foodservice distribution businesses, according to Robert Sledd, chairman and CEO of PFG. He said that PFG plans to use about $290 to repay its debts, with the balance used as a return to shareholders.

?We expect this will leave the company well positioned to pursue continued growth opportunities in the future," Mr. Sledd said in a statement.