Total Produce has agreed to purchase a 45% share of its competitor, fresh produce company Dole, for $300 million.
According to Total Produce, the motive for this transaction was an expectation that demand for fresh fruit and vegetables will surge, propelled by what te company terms “a structural trend towards health eating and snacking.”
The firm plans to raise $150 million towards the cost of financing the purchase of the stake in Dole via a placing of its shares with existing and new investors.
This deal will merge two of the world’s leading fresh produce companies, with complementary market positions in various product segments and geographies.
Total Produce said it also represents a crucial step in its history and a continuation of its successful expansion strategy.
“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,” said Carl McCann, chairman of Total Produce.
“I believe that this investment by Total Produce in Dole is the single most positive step in our company’s history,” he said. “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.”
As part of the transaction, Total Produce will share managerial rights including equal board representation. David H Murdock will remain chairman of Dole, with McCann as its vice-chairman.
Dole holds the number one and number three rankings in bananas in North America and Europe. It also retains the number two and number three spots for pineapples in North America and Europe, and ranks as the second-leading company for fresh-cut salads in North America.
For the fiscal year ending in October 2017, Dole reported revenue and adjusted EBITDA of $4.455 billion and $237 million, respectively.