Shares in Dundalk-based Total Produce jumped over 6% at one stage today after it said it had agreed to buy a 45% stake in rival fresh produce company Dole for $300 million.
Total Produce said the deal was motivated by its expectation that demand for fresh fruit and vegetables will rise strongly driven by what it calls "a structural trend towards healthy eating and snacking".
The company said this evening, it raised €145 million from the sale of 63 million shares to fund the acquisition. The shares were priced at €2.30 each, and it amounted to about a fifth of the company's issued share capital prior to the sale.
The deal brings together two of the world's biggest fresh produce companies, with complementary market positions in various product segments and geographies.
Total Produce said it also represents a very significant step in its history and a continuation of the company's successful expansion strategy.
"We are delighted to have signed an agreement with Dole, long held in the highest regard as one of the world's best fresh produce companies, with iconic brands dating back to 1851," commented Total Produce's chairman Carl McCann.
"I believe that this investment by Total Produce in Dole is the single most positive step in our company's history," Mr McCann said.
"It places Total Produce at the forefront of our industry, and we anticipate it will create significant additional value for shareholders in the years ahead," he added.
As part of the deal, Total Produce will share governance rights including equal board representation. David H Murdock will continue to be chairman of Dole and Carl McCann will be its vice chairman.
Dole has the number one and number three positions in bananas in North America and Europe. It also holds the number two and number three spot for pineapples in North America and Europe and is the second biggest company for fresh-cut salads in North America.
For the year to October, Dole generated revenue and adjusted EBITDA of $4.455 billion and $237m respectively.
Shares in Total Produce were higher in Dublin trade today.
