Dole Food’s $9.7bn Merger with Total Produce

By Zahra Malik, Devi Vanalia, Baliny Ganeshakumaran (University of Manchester) and Luca Delpippo, William Chang, Sanjana Ramaswamy, Jinghan Jennifer (University of St Andrews)


Overview of the deal

Acquirer: Dole Food

Target: Total Produce

Implied Equity Value: $1.8bn

Total Transaction Size: $9.7bn

Closed date: expected to close in late Q2 or early Q3 2021, subject to the approvals and conditions set.

Target advisor: Goldman Sachs International acted as exclusive financial advisor to Total Produce.

US fruit and vegetable producer Dole Food is to merge with Ireland-based Total Produce to create a new US-listed company Dole plc, which will be the world’s largest fresh produce company and will have an estimated revenue of $9.7 billion.

Total Produce have reached a deal with Castle & Cooke, a real estate company that owns a majority stake in Dole’s parent company Dole Holdings, to form Dole plc. As a condition of the transaction, Dole plc’s will list on a major U.S. exchange. Additionally, to raise $500m to $700m, Total Produce will delist from the London Stock Exchange and Euronext.

Total produce, said the transaction will deliver savings of $30m to $40m over the medium term, helping the company to reach a long-term target of 5% to 7% annual growth in earnings before tax, depreciation and amortisation.The transaction will simplify the existing structure between the two companies by unifying Dole and Total Produce under common ownership, with the objective of enabling full operational integration, realisation of synergies and value creation across the enlarged business.

“I am delighted with this Transaction, which combines two highly complementary premium businesses to create the global leader in fresh produce. I am confident the combined business will open new avenues of value creation for shareholders and pursue innovation in healthy nutrition for our customers worldwide.” - Carl McCann, chairman of Total Produce.

Company Details: (Acquirer - Dole Food)

Dole Food Company, Inc. is the largest producer of fruit and vegetables in the world. Dole markets fresh and frozen juices and fruits and owns a shopping line, Dole Ocean Cargo Express.

Founded in 1851, headquartered in O’ahu, Hawaii, USA

CEO: David H. Murdock

Number of employees: 36,000

Combined 2020 revenue of $9.7B and adjusted EBITDA of $379m.

Company Details: (Target - Total Produce)

Total Produce plc is one of the world’s largest fresh produce producers and providers. Total Produce grow, sourcing, import, package, market, and distribute over 300 lines of fresh produce.

Founded in 2006, headquartered in Dundalk, Ireland

CEO: Rory P. Byrne

Number of employees: 6,005

Market Cap: 810.492M (as of 24/2/2021)

EV: $1.16B

LTM Revenue: $3.79B


LTM EV/Revenue: .31 LTM EV/EBITDA: 9.02

Projections and Assumptions

Short-term consequences

Through the announcement of the deal, the shares of Total Produce rose by 18.6 per cent to £1.66. The merger will allow Dole to become the biggest fresh produce company globally with estimated combined 2020 revenue of about $9.7 billion, adjusted EBITDA of around $379m and total assets of about $4.5 billion. Dole plc has estimated that it will be approximately two times larger than its nearest competitor and will have unparalleled leadership in the produce supply chains. Dole plc intends to raise $500-700m in equity capital to strengthen and de-lever the combined balance sheet.