Total Produce to acquire 45% equity stake in Dole Food Company

Total Produce, Europe's leading fresh produce company, is pleased to announce that it has entered into a binding agreement to acquire a 45% equity stake in Dole Food Company from Mr. David H. Murdock for a cash consideration of $300 million (the "Transaction").

Dole is one of the world's largest fresh produce companies and a producer and marketer of high quality fresh fruit and vegetables. For the twelve months ended October 7, 2017, Dole generated revenue and Adjusted EBITDA of $4,455 million and $237 million2, respectively. The transaction consideration for the 45% interest implies a Dole enterprise value of approx. $2 billion and approx. 9x Dole Adjusted EBITDA3.

The Transaction brings together two of the world's leading fresh produce companies, with complementary market positions in various product segments and geographies, and represents a very significant step in the history of Total Produce and a continuation of its successful expansion strategy.

The very highly regarded Dole management team will continue to operate the business as before, and Dole will continue to service its customers with high quality products as it has done in the past.

As part of the mutual agreement, Total Produce will share governance rights including equal board representation. Mr. Murdock will continue to be Chairman and Mr. Carl McCann will be Vice Chairman.

Total Produce has fully committed acquisition financing in place to secure funding of the Transaction. The Transaction is expected to generate low double digit adjusted earnings per share accretion for Total Produce in the first full fiscal year post closing.

Transaction highlights:
  • Attractive industry backdrop: Fresh fruits & vegetables sector is expected to outperform vis a vis packaged food driven by a structural trend towards healthy eating and snacking
  • Dole is an iconic brand with leading market positions and scale: Dole has #1 and #3 positions in bananas in North America and Europe, and #2 and #3 positions in pineapples in North America and Europe4 and #2 position in fresh-cut salads in North America
  • Bringing together two highly complementary businesses: The transaction creates the world's leading fruit & vegetables group with potential to realize synergies
  • Balanced transaction structure and terms: Provides Total Produce with significant governance rights and flexibility on path forward
  • Total Produce has a proven track record: The investment is a continuation of Total Produce's successful acquisition strategy with approx. 325%5 total shareholder return delivered to shareholders over the last 5 years

Commenting on the Transaction, Carl McCann, Chairman of Total Produce said:

"We are delighted to have signed an agreement with Dole, long held in the highest regard as one of the world's best fresh produce companies, with iconic brands dating back to 1851.

We are particularly pleased to be partnering with David Murdock who has been an inspirational and visionary leader since he acquired a majority shareholding in Dole in 1985.

We are greatly honoured that David, a good friend of my late father Neil, my predecessor as Chairman, has chosen Total Produce to be his partner. I look forward with great enthusiasm to working very closely together with David and his superb management team to continue to expand the business in the future.

I believe that this investment by Total Produce in Dole is the single most positive step in our company's history. It places Total Produce at the forefront of our industry, and we anticipate it will create significant additional value for shareholders in the years ahead."

Commenting on the Transaction, David H. Murdock Chairman and Owner of Dole said:

"With great pride I announce the creation of a new partnership between Dole Food Company and Total Produce.

For many years I have cherished my friendship with the McCann Family, and I know that my late friend Neil McCann would be so proud to see his son Carl McCann completing this strategic partnership between our two companies.

Both Dole and Total Produce have a standard of perfection that leads the industry in innovation, together we will further our joint mission of providing the highest quality produce to the world.”

Dole is an iconic brand with leading market positions and scale

Founded in 1851, Dole is one of the world's leading producers, marketers and distributors of fresh fruit & 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 recognized brands. Dole’s most significant products hold leading positions in their respective markets, including #1 and #3 positions in bananas in North America and Europe, respectively, as well as #2 and #3 positions in pineapples in North America and Europe, respectively6, and #2 in fresh-cut salads in North America.

Dole is also a leader in other fresh fruit, value- added and fresh- packed vegetables. Dole sells and distributes its fruit and vegetable products throughout its network in North America, Europe, Latin America, South Africa and Dubai. The DOLE brand is one of the most recognized brands for fresh fruit in the United States, as evidenced by a 63% unaided consumer brand awareness7.

Dole has built an integrated supply chain and operating platform by owning farmland, manufacturing plants, pack houses, ships, containers and port and research facilities. As of March 25, 2017, Dole owned and operated approximately 123,600 acres of farms and other land holdings around the world, including approximately 14,800 acres of actively marketed idle land for sale in Oahu, Hawaii. In addition, Dole owns a fleet of 15 refrigerated ships, 13 of which are dedicated to its operations, operates 11 cold storage facilities and approximately 15,600 refrigerated containers, and utilizes six salad manufacturing plants and more than 75 packing houses.

For the twelve months ended October 7, 2017, Dole generated revenue and Adjusted EBITDA of $4,455 million and $237 million, respectively. Over the period from fiscal 2014 to September 2017, Dole has generated average annual Adjusted EBITDA of $227 million. The net assets of Dole as at October 7, 2017 were $544 million.

Dole is currently owned by its Chairman Mr David H. Murdock, who has had a controlling interest in Dole since 1985.

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