WhiteWave to Take Earthbound Farm
WhiteWave Foods Company has agreed to acquire Earthbound Farm.
Both WhiteWave and Earthbound Farm are pioneers and innovators in the organic industry, recognized for creating the on-trend, high-growth food and beverage categories in which they compete. With anticipated 2013 net sales of over $500 million, Earthbound Farm is the largest organic produce brand in North America and a recognized leader in the value-added organic packaged salad category. Earthbound Farm also produces and markets an extensive line of organic fresh fruits and vegetables, frozen fruits and vegetables, and dried fruits and snacks. WhiteWave manufactures, markets, distributes, and sells branded plant-based foods and beverages, coffee creamers and beverages, and premium dairy products throughout North America and Europe under widely-recognized, leading brands including Silk, Horizon Organic, International Delight, and LAND O LAKES.
“Earthbound Farm is an outstanding organization well-known for innovation, freshness, organic stewardship and food safety. It is a natural extension of our business that reaffirms WhiteWave’s leadership in the organic foods and beverages industry in North America,” said Gregg Engles, chairman and chief executive officer of WhiteWave. “Fresh foods are one of the most attractive, emerging trends in the food industry today and the market for organic products continues to grow steadily. 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.”
Engles continued, “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. The acquisition is expected to be accretive to earnings per share in the first year after close and will add to our already-strong growth momentum. We look forward to partnering with our talented colleagues at Earthbound Farm as we work to change the way the world eats for the better.”
Earthbound Farm co-founder Drew Goodman said, “For 30 years, Myra and I have been committed to Earthbound Farm's mission to bring the benefits of organic food to as many people as possible. We both believe that WhiteWave continues to be a leader in improving how food is produced and will help Earthbound Farm achieve its original mission and reach its full potential. We're excited for the future of Earthbound Farm and the opportunity to join the WhiteWave family."
“I can’t imagine a better fit for Earthbound Farm than WhiteWave, bringing together two of the leading companies in the good food movement,” said Earthbound Farm chief executive officer Charles Sweat. “Both companies have a heritage nurtured from small beginnings. And both companies believe in the importance of scaling the production of better food that makes for healthier people and a healthier planet.”
The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to be completed during the first quarter of 2014.
WhiteWave plans to operate Earthbound Farm as a separate business unit, based in San Juan Bautista, Calif. No significant operational changes are anticipated at Earthbound Farm as a result of the acquisition.
Including the impact of purchase accounting, WhiteWave expects that this acquisition will add approximately $0.07 cents per share to its adjusted net earnings in the first fiscal year, before transaction costs. This estimate is subject to the final closing balance sheet valuation.
WhiteWave plans to fund the acquisition with borrowings under its existing credit facilities. In order to provide continued capacity for future growth, the company also intends to increase its credit facilities by $500 million, subject to lenders commitments. The company anticipates completing the increase to its credit facilities in December 2013.