California-based Limoneira Company (Nasdaq: LMNR) is set to acquire Chilean citrus company Fruticola San Pablo for US$13 million, continuing its rapid global expansion.

Limoneira has entered into an agreement in the form of a binding memorandum of understanding to purchase the La Serena-based company's ranch and related assets.

The San Pablo ranch consists of 3,317 total acres on two parcels, including 247 acres producing lemons, 61 acres producing oranges, the opportunity to immediately plant 120 acres for lemon production, as well as the potential for approximately 500 acres of avocado production.

San Pablo’s results of operations will be included in Limoneira’s consolidated results of operations from the date of closing, according to a release.

Limoneira says it expects to invest an additional US$2.8 million in fiscal 2018 and 2019 for new citrus plantings and enhanced water infrastructure to expand citrus production to 650,000 cartons of lemons and 85,000 cartons of oranges annually upon maturity of the ranch at peak production.

San Pablo’s proximity to Limoneira’s existing Pan de Azucar (PDA) ranch in a coastal region near La Serena, Chile, is advantageous given PDA’s ownership in the Rosales packing business.

By adding San Pablo to the PDA assets and Rosales packing business, Limoneira says it will improve efficiencies and overall Chilean margins. Rosales will pack and sell all of the company's citrus production in the region under Limoneira’s marketing team.

"The addition of the San Pablo ranch to our growing global presence is consistent with our long-term strategy to dramatically expand our agribusiness internationally as a global, year round supplier of citrus," president and CEO Harold Edwards said.

We have a very strong pipeline of potential acquisitions around the world, including the United States, and believe we are very well positioned to capitalize on this tremendous long-term growth opportunity.”

Alex Teague, senior vice president, said: "This acquisition enables us to utilize our existing packing operation in Chile to improve margins for San Pablo’s current and future production.

"In addition, we will immediately begin planting additional acreage for increased lemon production. We have known the management team at San Pablo for many years and are very excited to leverage our current assets to expand production and distribution within Chile and throughout the world."

In February, Limoneira acquired the majority of another Chilean citrus producer in La Serena, Pan de Azucar (PDA) for US$5.8 million, which is located near to the San Pablo farm.

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