As of the most recent pre-market check, shares of Calavo Growers, Inc. (NASDAQ: CVGW) are up 13.87%, indicating a notable pre-market spike. The increase comes after the company received an unsolicited, non-binding takeover offer. The indicative offer, includes both cash and stock from the proposing corporation and describes a possible purchase of all existing shares at a nominal value of $32.00 per share.
Recent Performance Fuels Market Confidence
Calavo Growers’ (CVGW) improved financial results in the second quarter of fiscal year 2025 seem to have played a part in the bidder’s interest. The company reported a considerable growth in net sales and profitability, with the Fresh business experiencing the largest gain.
This gain was primarily due to higher average avocado prices, which helped compensate for a decline in volume from year to year. Strong avocado margins were a major factor in Calavo Growers’ stated rise in gross profit per carton.
However, $0.9 million in tariffs under the United States-Mexico-Canada Agreement (USMCA), which were in place for only three days in March 2025, temporarily hurt profitability. The company’s Board of Directors nonetheless declared that stockholders on file as of June 30, 2025, would receive a quarterly cash dividend of $0.20 per share on July 30, 2025.
The Optimistic Outlook
In the second half of 2025, Calavo Growers anticipates more growth, especially in its Prepared division. Beginning in Q3, the business anticipates significant benefits due to volume increase from new customer engagements and strengthened relationships with current clients.
The firm is optimistic in its ability to maintain pricing strength while expanding its client base, and good weather during the California avocado season are also anticipated to improve performance.
Proposal Under Review
Calavo Growers’ Board of Directors is now reviewing the proposal in cooperation with legal and financial consultants; it is still subject to financing conditions and due diligence. CVGW stressed that there is no guarantee that the offer would lead to a completed sale and that it is not legally binding.
