Campbell to Acquire Bolthouse Farms for $1.55 Billion

Devan Biswas
09 Jul, 2012
New York City

Campbell Soup agreed to acquire packaged fresh vegetable and premium beverages maker Bolthouse Farms for $1.55 billion and said earnings in 2013 will increase between 5 cents and 7 cents a share.

[R]9:20 AM New York – Campbell Soup agreed to acquire packaged fresh vegetable and premium beverages maker Bolthouse Farms for $1.55 billion and said earnings in 2013 will increase between 5 cents and 7 cents a share.[/R]

Campbell Soup Co agreed to acquire premium beverage and packaged fresh vegetable maker Bolthouse Farms for $1.55 billion.

The struggling soup maker has been on the lookout to expand into fresh vegetables and other premium products for more than three years.

The deal is expected to close late in the summer and is likely to be accretive to Campbell earnings as early as next year. Campbell plans to use the acquisition to grow into $12 billion packaged fresh vegetable market.

Bolthouse reported sales of $689 million in the fiscal year that ended March and earnings before interest and taxes of $92 million. Sales in the last two years increased at an annual rate of 7% and Bolthouse employs 2,100 people.

Campbell plans to integrate Bolthouse with its V8 juice business and on a combined basis it will have revenues of $1.2 billion.

Private equity fund, Madison Dearborn Partners purchased Bolthouse in 2005.

Founded in 1915 and operating from Bakersfield, California, Bolthouse Farms product portfolio includes fresh carrots, salad dressings, fresh juices and frozen vegetables sold under the brand name Green Giant and private label offerings.

Campbell said in a statement that earnings are expected to increase between 5 cents and 7 cents a share in 2013 after the acquisition and plans to keep Bolthouse as a separate division and management and President and Chief Executive Jeff Dunn are expected to stay with the company.

Campbell is expected to fund the purchase with the help of short and long term debt and was advised by Morgan Stanley and Credit Suisse and Goldman Sachs advised Madison Dearborn.

Campbell has long term debt of $2 billion on its balance sheet and has struggled with sales and earnings growth in the last three years.

Campbell also revised its previous sales and earnings outlook that did not include Bolthouse acquisition.

The company now estimates sales in fiscal 2012, excluding acquisition, will be near the low end of the previous guidance between zero and 2% and adjusted EBIT decline towards the low end of the previous estimate between 7% and 9% and adjusted earnings per share to fall near the upper end of the forecast of between 5% and 7%.