Campbell Soup acquires Bolthouse Farms for $1.55bn

Campbell Soup has completed the acquisition of California-based Bolthouse Farms from private equity firm Madison Dearborn Partners in a deal worth $1.55bn.

The soup firm funded the deal through a combination of short- and long-term borrowings.

In July 2012, Campbell entered into an agreement to acquire Bolthouse Farms as a part of its plan to enter into the packaged fresh foods market.

Bolthouse Farms markets and sells fresh carrots under brands such as Bolthouse Farms, Earthbound Farms and Green Giant brands; in addition to refrigerated salad dressings and beverages under the Bolthouse Farms brand, as well as offering private label products.

The company holds a leading market position in fresh carrots and super-premium beverages in the US, besides a growing presence in refrigerated salad dressings.

Bolthouse Farms reported sales of $689m and adjusted EBIT of $92m for the financial year ending 31 March 2012, and experienced a compound annual net sales growth of 7% from 2010 through 2012.

Campbell president and chief executive officer Denise Morrison said the acquisition would complement the company’s existing portfolio and growth strategies.

"This gives Campbell one of the leading positions in both the fast-growing packaged fresh food market and in healthy beverages and provides us with an opportunity to expand into adjacent segments that leverage exciting consumer trends," she said.

New Jersey-based Campbell Soup will operate Bolthouse as a separate business division, while members of the senior management team of the newly acquired company will continue to lead the firm.

Campbell expects the acquisition to add approximately $0.05 to $0.07 per share to its adjusted net earnings in fiscal year 2013, before transaction costs.

This acquisition is another instance of a packaged food and beverage company entering into healthy foods segment. In July 2012, Pepsico announced that it would be selling yogurt in the US through its joint venture with German dairy company Theo Muller.

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Image: Campbell Soup expects to gain a leading position in healthy beverages and packaged food segments with the acquisition of Bolthouse Farms. Photo: courtesy of Coolcaesar.