LONDON: Total Produce plc, Dole Food Company and affiliates of Castle & Cooke (C&C) have entered into a binding transaction agreement to combine under a newly created, U.S. listed company, Dole plc.
The Transaction will simplify the existing structure between the two companies by unifying Dole and Total Produce under common ownership, with the objective of enabling full operational integration, realisation of synergies and value creation across the enlarged business.
Under the terms of the Agreement, Total Produce shareholders will receive 82.5% of Dole plc shares and the C&C shareholders will receive 17.5% of Dole plc shares, in each case based on the fully diluted outstanding shares immediately prior to the completion of the transaction.
Dole plc will be the global #1 in fresh produce with estimated combined 2020 revenue of approximately US$9.7 billion, Adjusted EBITDA of approximately US$379 million and total assets of approximately US$4.5 billion.
Dole plc will be well positioned to deliver attractive long-term growth and utilise its increased size and network to drive market penetration and cross-selling.
Dole plc will benefit from the strength of the Dole brand to further expand its product offering and pursue synergistic M&A in a fragmented and structurally growing industry.
Per the Agreement, Dole plc’s completion of an initial public offering and a listing on a major U.S. stock exchange is a condition for completion of the Transaction.
Dole plc intends to target raising US$500 to US$700 million in primary equity capital to strengthen and de-lever the combined balance sheet. Upon completion of the U.S. listing of Dole plc, Total Produce will cease to be listed on Euronext Dublin and the London Stock Exchange.
Supported by the delivery of synergies and improved trading characteristics in the U.S. public market, successful completion of the Transaction is expected to create significant value equivalent to at least €2.15 per Total Produce share based on achieving the minimum agreed valuation of US$215 million for the 17.5% stake in Dole plc owned by the C&C shareholders on a fully diluted basis immediately prior to completion of the Transaction.
Total Produce is today one of the world’s largest fresh produce producers and providers. Operating out of 26 countries (30 inclusive of Dole) while serving many more, Total Produce’s reach extends across the globe incorporating over 160 facilities (over 250 facilities inclusive of Dole) including farms, manufacturing and ripening facilities and cold storage warehousing, packhouses and distribution hubs.
On 1 February 2018, Total Produce announced the acquisition of a 45% stake in Dole Holdings from the C&C shareholders for cash consideration of US$300 million, which was completed on 31 July 2018. This initial step laid the groundwork for a collaborative partnership between Total Produce and Dole.
The Transaction announced today is a logical next step to bring the companies together and unify them under one simplified structure, which the Board of Directors of Total Produce believes will serve to unlock the potential that exists for the enlarged business going forward.
Founded in 1851, Dole Food Company, Inc. is one of the world’s leading producers, marketers and distributors of fresh fruit and fresh vegetables. Dole provides retail, wholesale and foodservice customers around the world with a diverse portfolio of the finest, high-quality fresh fruit and vegetable products bearing the DOLE brand and other brands.
At present, the C&C shareholders own a combined 55% interest in Dole Holdings and Total Produce owns a 45% interest in Dole Holdings, which it acquired from the C&C shareholders on 31 July 2018.