Dole Food Company, Inc. (NYSE: DOLE) today announced completion of the
sale of its worldwide packaged foods and Asia fresh businesses to ITOCHU
Corporation for $1.685 billion cash, resulting in a major portion of
Dole’s operations and assets being sold, including exclusive rights to
the DOLE® brand on certain packaged food products worldwide and on
certain fresh produce in Asia, Australia and New Zealand.
“This transformative transaction results from our comprehensive
strategic review of Dole’s businesses announced May 3, 2012, aimed at
enhancing shareholder value, and was approved by our stockholders
December 6, 2012,” said David H. Murdock, Dole’s Chairman and CEO. “The
Dole operations will no longer include the worldwide packaged foods and
Asia fresh businesses, which for fiscal 2011 represented approximately
34% of Dole’s revenues and 56% of its operating income.”
The new Dole will have a smaller footprint as a commodity produce
company with overall revenue in the $4.2 billion range with two lines of
business: fresh fruit and fresh vegetables. “Dole will remain an
industry leader in the sourcing, distribution and marketing of bananas,
pineapples and other tropical and deciduous fruits, packaged salads,
fresh-packed vegetables and fresh berries,” said C. Michael Carter,
Dole’s President and Chief Operating Officer. “We are excited and very
optimistic about the long-term future of the new Dole and its prospects.”
Dole has put in place a new capital structure which, together with the
proceeds from the sale transaction, was used to pay off Dole’s existing
indebtedness of approximately $1.7 billion, to pay transaction-related
taxes, costs and expenses, and to pay for the extinguishment of all of
its long-term Japanese yen hedges and the European Commission’s fine of
€45.6 million; and provides funding for the anticipated right-sizing of
the new Dole and other post-closing restructuring expenses, and the
possible resolution of the previously disclosed Honduras tax case and
the DBCP cases.
“We are pleased to announce Dole’s new credit facility with five of our
banking partners, which includes a $500 million term loan and a $150
million revolving credit facility,” said Carter. “The new credit
facility provides needed flexibility to enhance shareholder value and to
meet future competitive challenges as we launch the new Dole. Dole’s
resulting net leverage ratio is approximately 2.5x (based on the new
debt structure and Dole’s 2013 Adjusted EBITDA guidance), and Dole will
benefit from a significant reduction in interest expense.”
Dole recently announced plans to appeal to the EU Court of Justice the
decision by the EU General Court affirming the European Commission’s
fine of €45.6 million, for alleged anticompetitive information exchanges
involving Dole Fresh Fruit Europe OHG and other EU banana importers in
Germany 10 years ago. “Our first quarter 2013 financial results will
include an additional provision of $42 million to fully provide for the
results of this decision,” said Carter. “We strongly believe that the
European competition laws were not violated.”
Dole Food Company, with 2012 revenues from continuing operations of $4.2
billion, is one of the world’s largest producers and marketers of
high-quality fresh fruit and fresh vegetables. Dole is an industry
leader in many of the products it sells, as well as in nutrition
education and research. For more information, please visit www.dole.com
or http://investors.dole.com.
This release contains “forward-looking statements,” within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve a
number of risks and uncertainties. Forward-looking statements, which are
based on management’s current expectations, are generally identifiable
by the use of terms such as “may,” “will,” “expects,” “believes,”
“intends,” “anticipates” and similar expressions. The potential risks
and uncertainties that could cause actual results to differ materially
from those expressed or implied herein include weather-related
phenomena; market responses to industry volume pressures; product and
raw materials supplies and pricing; energy supply and pricing; changes
in interest and currency exchange rates; economic crises and security
risks in developing countries; international conflict; and quotas,
tariffs and other governmental actions. Further information on the
factors that could affect Dole’s financial results is included in its
filings with the SEC.