Agri-products supplier Universal Corporation has signed a definitive agreement to acquire US-based speciality dehydrated vegetable, fruit and herb processing company Silva International in a $170m deal.

Upon the completion of the deal, Silva will be part of Universal’s plant-based ingredients portfolio, which includes FruitSmart and Carolina Innovative Food Ingredients (CIFI).

Established in 1979, Silva is engaged in purchasing more than 60 types of dehydrated vegetables, fruits and herbs from over 20 countries worldwide.

The company also processes raw materials to produce custom dehydrated vegetable- and fruit-based ingredients and has a 380,000ft² manufacturing facility.

Universal Corporation chairman, president and CEO George Freeman said: “We’re excited to have reached this agreement with Silva as we continue to diversify our offerings and generate new opportunities for value creation.

“This acquisition builds on our investment in FruitSmart and expands our plant-based ingredients platform.

“With this acquisition, we expect these businesses to represent 10% to 20% of our EBITDA by fiscal year 2022, ahead of our previously stated target outlined as part of our capital allocation strategy.”

The deal is expected to conclude in October, subject to customary closing conditions.

Silva majority owner and CEO Heinz-Peter Schmidt said: “For more than 40 years, Silva has consistently produced flavorful, high-quality, natural speciality ingredients to meet our customers’ specifications.

“By joining Universal, we will be able to take advantage of opportunities for collaboration and growth while remaining true to our culture and our mission.”

Following the close of the deal, Silva president Kent DeVries will continue to run the business and report to Universal Global Ventures senior vice-president Patrick O’Keefe.

Universal Corporation expects to finance the transaction with cash on hand and borrowed funds under its committed revolving credit facility.