WhiteWave Foods To Acquire Earthbound Farm For About $600 Mln

(RTTNews) - Consumer packaged food and beverage company WhiteWave Foods Co. (WWAV) said Monday that it has agreed to acquire organic food company Earthbound Farm from its existing shareholders, led by private equity firm Kainos Capital as well as founders Drew and Myra Goodman, for about $600 million in cash.

WhiteWave noted that the acquisition will bolster its presence in the organic foods and beverages industry in North America. The company expects to complete the transaction during the first quarter of 2014.

Earthbound Farm, with anticipated 2013 net sales of over $500 million, produces and markets organic fresh fruits and vegetables, frozen fruits and vegetables, and dried fruits and snacks. Founded in 1984 on a 2.5-acre backyard garden, the company now offers more than 100 varieties of certified organic salads, fruits and vegetables grown on more than 50,000 crop acres by more than 200 farmers.

WhiteWave makes and sells branded plant-based foods and beverages, coffee creamers and beverages, and premium dairy products throughout North America and Europe under brands including Silk, Horizon Organic, International Delight, and Land O Lakes.

Gregg Engles, Chairman and Chief Executive Officer of WhiteWave Foods said, "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."

WhiteWave plans to operate Earthbound Farm as a separate business unit, based in San Juan Bautista, California. The company does not anticipate any significant operational changes at Earthbound Farm as a result of the acquisition.

Including the impact of purchase accounting, WhiteWave expects this acquisition would add nearly $0.07 per share to its adjusted net earnings in the first fiscal year, before transaction costs. The company noted that the estimate is subject to the final closing balance sheet valuation.

WhiteWave plans to fund the acquisition with borrowings under its existing credit facilities. The company said that to provide continued capacity for future growth, it plans 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.

J.P. Morgan acted as financial advisor to WhiteWave, while Haynes and Boone, LLP acted as its legal advisor.

For Earthbound Farm, Barclays and Houlihan Lokey acted as financial advisors, while Weil, Gotshal & Manges and Cooley LLP acted as its legal advisors.

WWAV closed Friday's trading at $21.78, up $0.29 on a volume of 895,600 shares.