Dole to Dispose of Two Businesses For $1.7 Billion
US-based Dole Food Company has agreed to sell its worldwide packaged foods and Asian fresh produce businesses to Itochu Corporation of Japan for $1.685 billion in cash. The transaction is in line with Dole’s strategic business review process with the cash proceeds being used to reduce debt and for restructuring.
Dole Worldwide Packaged Foods produces canned pineapple, canned pineapple juice, fruit juice concentrate, fruit in plastic cups, jars and pouches, fruit parfaits, healthy snack foods and frozen fruit. Dole Asia Fresh Produce grows, sources, ships and distributes consistently high-quality fresh fruit and vegetables principally in Asia. The combined revenue of these businesses totaled approximately $2.5 billion in 2011 with adjusted EBITDA of about $190 million. The agreement provides Itochu with exclusive rights to the Dole trademark on packaged food products worldwide and on fresh produce in Asia, Australia and New Zealand.
David A DeLorenzo, Dole’s president and chief executive, comments: “We are realising a premium valuation for our worldwide packaged foods and Asia fresh produce businesses and will retain a strong fresh produce business that has increased financial flexibility to grow.”
Dole Food Company will remain an international company, retaining its entire North American fresh vegetables business as well as its fresh fruit businesses in North America, Latin America, Europe and Africa, which together generated approximately $4.2 billion in revenues in fiscal 2011.
Following completion of the transaction, Dole’s fresh produce business will continue to be an industry leader in the sourcing, distribution and marketing of bananas, pineapples and other tropical fruits, packaged salads, fresh-packed vegetables and fresh berries, representing the number one or two market share in many of the fresh fruit and vegetable products it sells in North America. Dole will continue to own the significant operating assets associated with these businesses, as well as non-core assets, including approximately 25,000 acres located in Oahu, Hawaii.
