CAMDEN, NJ -- Campbell Soup Co. announced an agreement to acquire Bolthouse Farms from a fund managed by private equity firm Madison Dearborn Partners LLC (Chicago) for $1.55 billion in cash.
The acquisition of Bolthouse will provide Campbell with a substantial presence and new platform for expansion in the rapidly growing $12-billion market for packaged fresh foods, Campbell said. The addition of Bolthouse's premium refrigerated beverages will complement Campbell's V8 beverage business and create one of the industry's largest "healthy" beverage platforms, with annual sales of approximately $1.2 billion.
Bolthouse is a vertically integrated food and beverage company that develops, produces and markets value-added proprietary natural products. It has leading market positions in fresh carrots and super-premium beverages in the U.S., and a growing presence in refrigerated salad dressings.
Bolthouse's strong market position in fresh carrots in the U.S. and Canada also will provide an attractive opportunity for growth with value-added "healthy" snacking products, the company added.
Campbell president and chief executive Denise Morrison described Bolthouse as a strategic fit with Campbell. "Its business platforms, capabilities and culture are well aligned with the core growth strategies we announced last year," she said. "Its strong position in the high-growth packaged fresh category complements our chilled soup business in North America, and offers exciting opportunities for expansion into adjacent packaged fresh segments that respond directly to powerful consumer trends."
Founded in 1915, Bolthouse Farms is headquartered in Bakersfield, CA, and employs about 2,100 people. It markets and sells its beverages and dressings under the Bolthouse Farms brand, and its carrots under the Bolthouse Farms, Earthbound Farms and Green Giant brands, as well as under private labels.
In its fiscal year ended March 31, 2012, Bolthouse had sales of $689 million, and adjusted earnings before interest and taxes of $92 million. From 2010 through 2012, it had a 7% compound annual net sales growth.
Campbell plans to operate Bolthouse Farms as a separate business unit. Members of Bolthouse's senior management team, including president and chief executive Jeff Dunn, will remain with the company.
END OF SUMMER CLOSE
The closing is subject to regulatory approvals and is expected to occur late this summer.
Campbell will fund the acquisition of Bolthouse through a combination of short- and long-term borrowings. Including the impact of purchase accounting and suspension of the strategic share repurchase plan, Campbell expects that this acquisition will add approximately 5¢ to 7¢ a share to its adjusted net earnings in fiscal year 2013, before transaction costs. This estimate is subject to the finalization of the closing date and final closing balance sheet valuation.
The acquisition of Bolthouse Farms was not contemplated in Campbell's previous guidance concerning its projected financial results for fiscal 2012. The company said today that, excluding acquisition costs, it remains on track to deliver results consistent with that guidance, with fiscal 2012 sales growth expected to be near the low end of the previously forecast range of 0% to 2%; adjusted EBIT expected to decline at a level near the low end of the previously forecast range of 7% to 9%; and adjusted earnings per share expected to decline at a level near the upper end of the previously forecast range of 5% to 7%.