The birth of a produce giant: Total Produce secures Dole stake By Katy Askew 01-Feb-2018 - Last updated on 01-Feb-2018 at 16:05 GMT 

Total Produce, the owner of the Fyes banana brand, will pay US$300m for a 45% stake in Dole Food Co. in a deal that will create the world’s leading fruit and vegetables group. The agreement values fruit rm Dole at an enterprise value of approximately €1.6bn ($2bn), giving a transaction multiple of around nine times Dole’s adjusted EBITDA. In the 12 months to 7 October 2017, Dole generated sales of €3.6bn ($4.46bn)and adjusted EBITDA of €1.9m ($237m). Announcing the deal, Total Produce said the transaction brings together two of the world’s leading fresh produce companies, which benet from “complementary market positions” in various product segments and geographies.

The Irish produce giant noted the transaction is a “signicant step” in its history, representing a continuation of its acquisitive expansion strategy. “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 signicant additional value for shareholders in the years ahead,” chairman Carl McCann said. Total Produce has been growing its business though M&A. Recent deals have included taking positions in The Fresh Connection, Oppenheimer Group and Progressive Produce. The company also formed a Nordic joint venture with local partner G. Kramer & Zonen. In its rst half nancial update, released in August, Total Produce reported that acquisitions had led to a 12% jump in group revenue. Acquisitions give earnings lift 2/2/2018

The acquisition is expected to generate “low double digit” adjusted earnings per share accretion for Total Produce in the rst full scal year post closing, Total Produce predicted. Total Produce is increasing its share of the global fresh fruit and vegetable sector. The company said this category is expected to “outperform” packaged foods, driven by a structural shift towards healthy eating and snacking. In Dole, Total Produce sees an “iconic band” with “leading market positions and scale”. Dole has number one and number three positions in bananas in the US and Europe respectively. Dole will continue to operate its “business as before”, led by its “very highly regarded” management team. David Murdock, who has held a majority stake in Dole since 1985, will continue to chair the group’s board but Total Produce will share governance rights, including equal board representation.

This structure will provide Total Produce with “exibility” on the “path forward”, the company suggested. Total Produce and Dole have jointly agreed to a strategic plan to expand the business in the years ahead. Dole and Total Produce expect to deliver annualised synergies and cost savings at Dole of €12-16m ($15-20m) in the short term and €28m ($35m) over the medium term. Dole and Total Produce said they remain committed to deleveraging Dole’s balance sheet, which has seen high debt levels hamper Dole’s nancial performance. This will be achieved through organic cash ow generation, focused investments and working capital management, active portfolio management and review of non-core assets, the companies said. The deal has been reached after talks between Dole and another European produce group, Belgium’s Greenyard Foods, fell through earlier this