--Campbell buying juice-maker Bolthouse Farms for $1.55 billion
--Deal gives Campbell platform in packaged fresh-food area that is
seeing better growth
--Campbell says deal will boost earnings in upcoming fiscal 2013
Campbell Soup Co. (CPB) is getting deeper into the beverage business
with an agreement to buy Bolthouse Farms Inc., a maker of high-end
juices and other drinks, from Madison Dearborn Partners LLC for about
$1.55 billion.
The acquisition of Bolthouse Farms, which also makes baby carrots and
refrigerated salad dressings, also expands Campbell's presence in the
packaged fresh-food category, an area of supermarkets and retailers
that's seeing better growth than the center-store area where most
packaged foods are sold.
Campbell hopes the deal can create a firm base from which to create a
broader portfolio of packaged fresh-foods, including soup, which it
already sells, but in far smaller amounts than its bread-and-butter
canned soup. Campbell President and Chief Executive Denise Morrison
said that Bolthouse "offers exciting opportunities for expansion into
adjacent packaged fresh segments that respond directly to powerful
consumer trends."
Campbell has tried to buy Bolthouse in the past, and it has a
long-standing relationship with the company. Campbell already buys
carrots from Bolthouse that it uses in its soups and also uses carrot
concentrate in its V8 juices, Campbell spokesman Anthony Sanzio said.
The deeper foray into beverages and into the perimeter of the
supermarket comes as Campbell continues to try to fix its base soup
business. Soup sales have been down for several years due to a
combination of shifting consumer preferences for simple meals, a lack
of successful new products and ineffective discounting that failed to
move products.
Campbell is trying to stabilize its soup business by halting deep
discounts and investing more into advertising and new products. It's
coming out with at least 30 new soup items in its next fiscal year,
including soups that come in pouches and in new flavors that try to
appeal to a younger demographic.
Campbell expects the deal to close in the late summer, and expects it
to increase its adjusted per-share earnings by five cents to seven
cents in its upcoming fiscal 2013. It otherwise backed its guidance
for fiscal 2012, which ends July 31.
For the fiscal year ended March 31, Bolthouse reported sales of $689
million, and earnings before interest and taxes of $92 million.
Campbell plans to operate Bolthouse as a separate business unit.
Bolthouse management, including President and Chief Executive Jeff
Dunn, will remain with the company.
Shares closed Friday at $32.99 and were inactive premarket. The stock
is down 3.5% in the last 12 months.
-Tess Stynes contributed to this article
Write to Paul Ziobro at paul.ziobro@dowjones.com
(END) Dow Jones Newswires
July 09, 2012 09:05 ET (13:05 GMT)
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