Calavo Growers Inc. (CVGW) shares jumped 12.93% in after-hours trading to $25.50, and the reason is pretty straightforward: the company announced it's getting acquired while simultaneously posting solid fiscal year results. Not a bad combo.

The Merger Math

Calavo Growers struck a definitive merger agreement with California-based Mission Produce Inc. (AVO), which will acquire the company for $27 per share. That valuation is based on Mission's 30-day volume-weighted average price ending January 13.

Here's how the deal breaks down: Calavo shareholders will receive $14.85 in cash plus 0.9790 shares of Mission stock for each share they own. It's a mixed consideration deal, giving shareholders both immediate cash and a stake in the combined entity.

Once everything closes, Mission Produce shareholders will control about 80.3% of the combined company, while Calavo shareholders will own roughly 19.7%. The companies expect to squeeze out $25 million in cost synergies from the combination, and they're targeting an August closing date, assuming they get the necessary regulatory approvals and shareholder votes.

Strong Fiscal Year Performance

The merger news came alongside Calavo's fiscal 2025 results, which actually look pretty good. For the full fiscal year ended October 31, 2025, the company reported net income from continuing operations of $20 million, up a whopping 192% from $6.8 million in fiscal 2024.

Adjusted net income from continuing operations climbed 42% to $28.9 million, or $1.62 per diluted share. Adjusted EBITDA from continuing operations rose 12% to $40.8 million from $36.5 million the prior year.

The one soft spot? Total net sales dipped to $648.4 million from $661.5 million. So revenue declined slightly, but the company managed to extract significantly more profit from what it did sell.

Fourth Quarter Snapshot

The fourth quarter showed similar dynamics. Net sales fell to $124.7 million from $170 million in the year-ago period, a pretty substantial decline. But net income from continuing operations swung to $3.8 million profit, compared with a $2.5 million loss in the same quarter last year. Again, lower sales but better profitability.

Technical Picture

Calavo's Relative Strength Index stands at 64.92, suggesting some momentum without being overbought territory. Over the past 12 months, the stock has risen just 0.27%, essentially flat before this merger announcement.

With a market cap of $403.13 million, shares have traded in a 52-week range between $18.40 and $28.72. According to market data, Calavo closed regular trading at $22.58, up 1.71%.

The stock sits at approximately 40.54% of its 52-week range, meaning it's closer to the bottom than the top. The $27 per share acquisition price represents a nice premium to where the stock was trading. The company has a Value score of 83.39, suggesting it may have been an attractive target on valuation metrics.