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Campbell Soup Co. has entered into an agreement to acquire Bolthouse Farms from a fund managed by Chicago-based private equity firm Madison Dearborn Partners LLC for $1.55 billion in cash. Bakersfield, Calif.-based Bolthouse is a vertically integrated food and beverage company that develops, manufactures and markets proprietary, high-value-added natural, healthy products, with leading U.S. market positions in fresh carrots and superpremium refrigerated beverages, along with a growing presence in refrigerated salad dressings.
According to Camden, N.J.-based Campbell, the deal will provide it with significant presence and a new platform for expansion in the rapidly growing $12 billion packaged fresh food market. Bolthouse’s beverages will complement Campbell’s successful V8 beverage business and result in one of the industry’s largest healthy-beverage platforms, with annual sales of about $1.2 billion. Additionally, Bolthouse’s strong market position in fresh carrots in the United States and Canada will offer a promising growth opportunity in the value-added healthy-snacking segment.
“Bolthouse is a great strategic fit with Campbell,” noted Denise Morrison, Campbell’s president and CEO. “Its business platforms, capabilities and culture are well aligned with the core growth strategies we announced last year. 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.”
Bolthouse 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, along with private label items.
Campbell plans to operate Bolthouse as a separate business unit. Members of the company’s senior management team, including president and CEO Jeff Dunn, will remain with the company, reporting directly to Morrison. “Campbell’s 140-plus year history of providing high-quality foods and beverages to consumers complements Bolthouse’s history of growth and innovation in fresh and packaged fresh foods,” said Dunn, adding that he foresaw “significant opportunities for accelerated growth for both companies.”
Campbell will fund the acquisition through a combination of short- and long-term borrowings. Subject to regulatory approvals and customary closing conditions, the deal is expected to wrap up in late summer 2012.
Morgan Stanley was the exclusive financial adviser to Campbell in the transaction, with Davis Polk & Wardwell acting as legal counsel. Credit Suisse and Goldman Sachs and Kirkland & Ellis LLP acted as financial adviser and legal counsel, respectively, for Bolthouse.