01 Feb 2018 --- Ireland-based fruit and vegetable giant Total Produce plans to make a significant investment in US rival Dole Food Company with proposals to acquire a 45 percent stake in the iconic fruit brand and create a powerful partnership. The transaction brings together two of the world’s leading fresh produce companies, with complementary market positions in various product segments and geographies, and represents a very significant step in the history of Total Produce, whose range includes deciduous fruits, tropical fruits, citrus fruits, salads, stone fruits and vegetables.
Total Produce has confirmed it has entered into a binding agreement to acquire the 45 percent equity stake in Dole Food Company for a cash consideration of US$300 million, in a statement sent to FoodIngredientsFirst.
“We are delighted to have signed an agreement with Dole, long held in the highest regard as one of the world’s best fresh produce companies, with iconic brands dating back to 1851,” says Carl McCann, Chairman of Total Produce.
“We are particularly pleased to be partnering with David Murdock (chairman) who has been an inspirational and visionary leader since he acquired a majority shareholding in Dole in 1985.”
“We are greatly honored that David, a good friend of my late father Neil, my predecessor as Chairman, has chosen Total Produce to be his partner. I look forward with great enthusiasm to working very closely together with David and his superb management team to continue to expand the business in the future.”
“I believe that this investment by Total Produce in Dole is the single most positive step in our company’s history. It places Total Produce at the forefront of our industry, and we anticipate it will create significant additional value for shareholders in the years ahead.”
Dole is one of the world’s largest fresh produce companies and a producer and marketer of high-quality fresh fruit and vegetables. For the twelve months ended October 7, 2017, Dole generated revenue and Adjusted EBITDA of US$4,455 million and US$237 million, respectively.
The transaction consideration for the 45 percent interest implies a Dole enterprise value of approximately US$2 billion.
The Dole management team will continue to operate the business as before, and Dole will continue to service its customers with high-quality products as it has done in the past.
As part of the mutual agreement, Total Produce will share governance rights including equal board representation. Murdock will continue to be Chairman and Carl McCann will be Vice Chairman.
Total Produce says it has fully committed acquisition financing in place to secure funding of the transaction which is expected to generate low double-digit adjusted earnings per share accretion for Total Produce in the first full fiscal year post-closing.
The deal comes at a very interesting time in fresh produce markets around the world as the fruit and vegetable sector is expected to outperform the packaged food sector, driven by global trends towards healthy eating and snacking.
Dole: An iconic brand with leading market positions & scale
Founded in 1851, Dole has grown into one of the world’s leading producers, marketers and distributors of fresh produce, supplying international retail, wholesale and foodservice markets.
Dole’s most significant products hold leading positions in their respective markets, including #1 and #3 positions in bananas in North America and Europe, respectively, as well as #2 and #3 positions in pineapples in North America and Europe, respectively #6, and #2 in fresh-cut salads in North America.
It’s also a leader in other fresh fruit, value-added and fresh-packed vegetables, selling and distributing its fruit and vegetable products throughout networks in North America, Europe, Latin America, South Africa and Dubai.
The Dole brand is one of the most recognized brands for fresh fruit in the US and the company has built an integrated supply chain and operating platform by owning farmland, manufacturing plants, pack houses, ships, containers and port and research facilities.
As of last March, Dole owned and operated approximately 123,600 acres of farms and other land holdings around the world, including approximately 14,800 acres of actively marketed idle land for sale in Oahu, Hawaii.
In addition, Dole owns a fleet of 15 refrigerated ships, 13 of which are dedicated to its operations, operates 11 cold storage facilities and approximately 15,600 refrigerated containers, and utilizes six salad manufacturing plants and more than 75 packing houses.
Total Produce: Proven track record
Total Produce adds how the investment is a continuation of the company’s successful acquisition strategy with approximately 325 percent total shareholder return delivered to shareholders over the last five years.
Commenting on the transaction, David H. Murdock, Chairman and Owner of Dole said he is extremely proud of the new partnership.
“For many years I have cherished my friendship with the McCann Family, and I know that my late friend Neil McCann would be so proud to see his son Carl McCann completing this strategic partnership between our two companies,” he said.
“Both Dole and Total Produce have a standard of perfection that leads the industry in innovation, together we will further our joint mission of providing the highest quality produce to the world.”
By Gaynor Selby
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