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Beverage News

Campbell to acquire Bolthouse Farms for $1.55 billion

July 9, 2012

Campbell Soup Co., Camden, N.J., has entered into an agreement to acquire Bolthouse Farms, Bakersfield, Calif., from a fund managed by private equity firm Madison Dearborn Partners LLC for $1.55 billion in cash.

Founded in 1915, Bolthouse is a vertically integrated food and beverage company focused on developing, manufacturing and marketing proprietary, high value-added natural and healthy products. The company has leading market positions in fresh carrots and super-premium beverages in the United States, along with a growing presence in refrigerated salad dressings.

The acquisition of Bolthouse will provide Campbell with significant presence and a new platform for expansion in the rapidly growing $12 billion market for packaged fresh foods, the company says. The addition of Bolthouse’s super-premium refrigerated beverages will complement Campbell’s V8 beverage business and will create one of the industry’s largest healthy beverage platforms, with annual sales of approximately $1.2 billion, the company adds.

“Bolthouse is a great strategic fit with Campbell,” said Denise Morrison, Campbell’s president and chief executive officer, in a statement. “Its business platforms, capabilities and culture are well aligned with the core growth strategies we announced last year. 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.”

Encompassing nearly 100 years of farming expertise and innovation, Bolthouse 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. It also offers private label products. For its fiscal year end of March 31, 2012, Bolthouse had sales of $689 million and adjusted earnings before interest and taxes of $92 million. From 2010 through 2012, the company had compound annual net sales growth of 7 percent. It employs approximately 2,100 people.

Campbell plans to operate Bolthouse Farms as a separate business unit. Members of Bolthouse’s senior management team, including President and Chief Executive Officer Jeff Dunn, will remain with the company. Dunn has built a strong team with deep expertise in beverage and consumer packaged goods, and he will report directly to Morrison, the company says.

“We are delighted to be joining Campbell and its family of beloved brands,” Dunn said in a statement. “Campbell’s 140-plus year history of providing high-quality foods and beverages to consumers complements Bolthouse’s history of growth and innovation in fresh and packaged fresh foods. We are excited by the alignment between our strategic visions and the significant opportunities for accelerated growth for both companies.”

Campbell will fund the acquisition of Bolthouse through a combination of short- and long-term borrowings. The closing of the transaction is subject to regulatory approvals and customary closing conditions and is expected to occur in late summer 2012. Including the impact of purchase accounting and suspension of the strategic share repurchase plan, Campbell expects that this acquisition will add approximately $0.05 to $0.07 cents per 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 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 percent; adjusted earnings before interest and taxes expected to decline at a level near the low end of the previously forecast range of 7 to 9 percent; and adjusted earnings per share expected to decline at a level near the upper end of the previously forecast range of 5 to 7 percent.

KEYWORDS: Bolthouse Farms Campbell Soup mergers and acquisitions

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