Campbell Soup has entered into an agreement to acquire Bolthouse Farms, a US-based food and beverage company, from private equity firm Madison Dearborn Partners for $1.55bn in cash.
The acquisition is a part of Campbell's strategy to strengthen its presence in the rapidly growing packaged fresh foods market.
Bolthouse has leading market positions in fresh carrots and super-premium beverages in the US, along with a growing presence in refrigerated salad dressings. Headquartered in Bakersfield, California, the company 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.
According to Campbell, the acquisition will complement its 'V8' beverage business, creating one of the industry's largest healthy beverage platforms, with annual sales of approximately $1.2bn. In addition, Bolthouse's fresh carrots business in the US and Canada will provide an opportunity for growth with value-added products in healthy snacking.
Campbell's president and CEO Denise Morrison said that Bolthouse's business platforms, capabilities and culture are well aligned with the core growth strategies the company announced in 2011.
"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," Morrison added.
For its fiscal year ended 31 March 2012, Bolthouse had sales of $689m and adjusted EBIT of $92m. From 2010 through 2012, the company saw a compound annual net sales growth of 7%.
Following the acquisition, Campbell plans to operate Bolthouse Farms as a separate business unit. Members of Bolthouse's senior management team, including president and CEO Jeff Dunn, will remain with the company.
Campbell will fund the acquisition of Bolthouse through a combination of short- and long-term borrowings. The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to be completed by late summer 2012.
