Dairy products company WhiteWave Foods is to expand its business in the organic food market with the planned acquisition of Earthbound Farm. WhiteWave will be purchasing the maker of organic packaged salads for USD600 million.
Earthbound's acquisition seemed strategic as the company's 2013 sales is projected to record at over USD500. Aside from producing organic vegetables and fruits it is also a supplier of frozen vegetables and fruits and dried fruits and snacks. It is also known as the largest organic produce brand in all of North America, Whitewave claimed.
On the other hand, WhiteWave owns popular brands including Silk, Land O Lakes and Horizon Organic. WhiteWave is a spin off company from dairy giant Dean Foods Co.
Chairman and Chief Executive Officer of WhiteWave Gregg Engles said, "It is a natural extension of our business that reaffirms WhiteWave's leadership in the organic foods and beverages industry in North America. 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 said on Monday that it will be acquiring the organic food producer from its existing shareholders. Earthbound's existing shareholders includes founders Drew and Myra Goodman and Kainos Capital. whiteWave will be operating Earthbound as a separate entity, keeping the latter's operations and management, except that it will be operating as a division of the former, the Bromfield, Colorado-based company said.
Once the transaction is completed, it is expected to be added to WhiteWave's earnings per share (EPS) in the first year after the deal has been finalized. The acquisition deal, said a Bloomberg report, is expected to be finalized in the first quarter of next year. WhiteWave's acquisition of Earthbound is anticipated to improve the former's adjusted earnings in its first fiscal year with an additional USD0.07 per share.
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