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Campbell Soup puts Bolthouse on its menu

by Demitri Diakantonis | Published July 9, 2012 at 12:21 PM

Campbell Soup Co. agreed Monday to acquire packaged foods maker Bolthouse Farms Inc. from Madison Dearborn Partners LLC for $1.55 billion in cash, making its first significant acquisition in more than three years.

Madison Dearborn acquired Bakersfield, Calif.-based Bolthouse in October 2005 in a deal that valued the target at around $1.12 billion. The Chicago private equity firm began a dual-track process for Bolthouse in March, considering both a sale and an initial public offering, according to sources. Campbell began to surface in media reports as a likely buyer for Bolthouse earlier this month.

Campbell, of Camden, N.J., will fund the acquisition through a combination of both short- and long-term debt.

Founded in 1915, Bolthouse makes packaged food and beverage products including those under the Earthbound Farms and Green Giant brands, among others. It employs more than 2,000. For the trailing 12 months ended March 31, Bolthouse generated $689 million in sales. The company had an annual compound sales growth rate of 7% between 2010 and 2012.

"Bolthouse is a great strategic fit with Campbell," Campbell CEO Denise Morrison said in a statement. "Its business platforms, capabilities and culture are aligned with the core growth strategies we announced last year."

Campbell said it will keep Bolthouse as a separate business unit, complementing its V8 beverage brand.

"We are excited by the alignment between our strategic visions and significant opportunities for accelerated growth for both companies," Bolthouse CEO Jeff Dunn added in a statement. Campbell expects Dunn and other senior managers to remain in place after the deal is completed, expected before the end of the third quarter, pending regulatory approval. The final purchase price is subject to a working capital adjustment.

Campbell said Monday's acquisition will not impact its 2012 earnings, but the company projects that Bolthouse will add between 5 and 7 cents earnings per share in 2013.

Campbell's last significant acquisition was its purchase of breadmaker Ecce Panis Inc. from Silver Ventures Inc. in April 2009 for undisclosed terms.

Campbell shares were trading flat at $33 on Monday morning, with its market capitalization at around $10.4 billion.

Morgan Stanley is advising Campbell, which is receiving legal counsel from Davis Polk & Wardwell LLP.

Credit Suisse Securities (USA) LLC along with Goldman, Sachs & Co. are advising Bolthouse, which is taking legal counsel from Kirkland & Ellis LLP.

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