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Total Produce to Move Listing to US After Dole Merger

19.2.2021

Shares of Total Produce were up over 25pc in Dublin on February 17 afternoon after it announced plans to combine with Dole Food Company under a newly created, US-listed firm Dole plc.  The combined company aims to raise between $500m-$700m (€415m-€580m) in an initial public offering in the US, ending Total's presence on Euronext Dublin in the process.

Total reached the agreement with Castle & Cooke (C&C), which owns a 55pc interest in Dole's parent company. The consideration for the 55pc stake in Dole equates to a minimum of $250m made up of $215m in equity and $35m in cash.

Total bought a 45pc stake in Dole for $300m (€247m) in July 2018 with the option to acquire 100pc of Dole within five years.

Under the terms of the agreement, Total Produce shareholders will receive 82.5pc of shares in the newly created Dole company, with C&C shareholders receiving the remaining shares. Completing the deal is subject to the merged company then carrying out an IPO, after which Total shareholders will hold 55pc of Dole PLC.

Carl McCann, chairman of Total Produce, said that while he would be "disappointed" to move the company from Euronext Dublin, "you just can't debate the US markets for a company of this kind with a brand name Dole".

"The availability of capital there is just quite different from what's possible here. The listing here [in Dublin] has been beneficial in the growth of the company, but I think the right home going forward for Dole PLC is the US marketplace." The transaction will simplify existing structures between the companies to enable more integration and value creation across the enlarged business, Total said.

When combined, Dole will have an estimated 2020 revenue of $9.7bn, adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) of approximately $379m in respect of last year, and total assets of about $4.5bn.

With the combined 2020 EBITDA expected to have increased 7pc in 2019, Mr McCann said it had been "a tough year, but I think we are fortunate to be in the food business."

The management of Total and Dole will continue to operate the combined business, and the merger will make Dole the leading fresh produce company in the world.  The newly created business will aim to expand its product, offering further and pursue mergers and acquisitions.

"Growth by  acquisition has always been part of our programme here, so that will continue unchanged. There will hopefully be slightly larger deals than before," Mr McCann said.

The new company will be incorporated in Ireland, with its headquarters in Dublin.

Davy stockbrokers said the deal, which still requires approval by the Irish company's shareholders and regulators, "catalyses significant equity upside for existing shareholders".


 

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