Total Produce enters deal to acquire 45% of Dole Food Company
Two of the world's largest fresh produce companies are on track to joining forces after Ireland-based Total Produce reached an agreement to purchase 45% of U.S.-headquartered group Dole Food Company for US$300 million.
After the first payment is made, Total Produce also has an option to buy a further 6%, which would make it the majority shareholder. However, the group says it currently has no intention to exercise the option.
The announcement comes less than a month after negotiations fell through for another European company, Greenyard, to acquire the group.
In a release, Total Produce described the acquisition as a "very significant step" in its history and a continuation of its successful expansion strategy.
The Dole management team is expected to operate the business as before and "service its customers with high quality products as it has done in the past".
David Murdock will continue as chairman of Dole while Total Produce chairman Carl McCann will be Dole's vice chairman.
Total Produce has fully committed acquisition financing in place to secure funding for the transaction, which gives Dole an enterprise value of approximately US$2 billion and around 9x adjusted EBITDA.
"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," McCann said in the release.
"We are particularly pleased to be partnering with David Murdock who has been an inspirational and visionary leader since he acquired a majority shareholding in Dole in 1985.
"We are greatly honoured 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."
McCann described the deal as the "single most positive step" in Total Produce'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," he said.
Dole chairman and owner David Murdock said it was with great pride that this announcement could be made.
"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."
The transaction is subject to anti-trust review and parties expect the deal to close by mid-2018.