Limoneira to acquire San Joaquin Valley citrus orchards

Limoneira Company announced that it has entered into a purchase agreement to acquire 157 acres of lemon, orange and specialty citrus orchards in San Joaquin Valley for approximately $3.3 million.

The transaction is expected to close in 60 days. The orchards are being acquired pursuant to purchase options contained in certain operating leases the Company has had since 2012 for approximately 1,000 acres of lemon, orange, specialty citrus and other crops, which the Company refers to as the Sheldon Ranch leases. The lease agreements include base rent of $500 per acre and contingent rent of 50% of the operating profit of the leased property as defined in the lease agreements. Total rent expense for fiscal year 2015 on the acquired properly is estimated to be $100,000 on the expected closing date of the transaction and was $231,000 for fiscal year 2014.

The estimated proceeds of $2.8 million from the previously announced sale of the Wilson Ranch, which is expected to close in August 2015, will be used to acquire the 157 acres of citrus orchards. The sale of the 52 acre Wilson Ranch and purchase of the 157 acres of citrus orchards qualifies as a like-kind exchange and will allow the Company to defer approximately $1.0 million of gain for tax purposes.

For more information visit www.limoneira.com.