Food and beverage company WhiteWave Foods is set to acquire Earthbound Farm from its shareholders and owners in an all-cash deal of $600m.
Earthbound Farm is an organic produce brand in North America. It produces and markets organic fresh fruits and vegetables, frozen fruits and vegetables, and dried fruits and snacks.
The acquisition is subject to regulatory approvals and customary closing conditions and is expected to close during the first quarter of 2014.
WhiteWave plans to back the transaction with borrowings under its existing credit facilities and operate the acquired business as a separate unit, based in San Juan Bautista, California.
In addition, the company intends to increase its credit facilities by $500m to provide continued capacity for future growth, with the process due for completion by December 2013-end.
It expects acquisition to add approximately $0.07 cents per share to its adjusted net earnings in the first fiscal year.
As a result of the acquisition, no significant operational changes are expected at Earthbound Farm.
WhiteWave chairman and CEO Gregg Engles said, "With Horizon Organic and Earthbound Farm, WhiteWave will now provide the two most popular gateways for consumers to enter into the organic category - produce and dairy.
"Over the last year, WhiteWave has established a solid foundation and delivered strong financial results as an independent company, and this acquisition will allow us to drive additional shareholder value."
JP Morgan served as financial advisor to WhiteWave, while Barclays and Houlihan Lokey to Earthbound Farm.
