Campbell Soup Company, the world's largest soupmaker, is set to acquire natural foods company Bolthouse Farms for approximately $1.55 billion in cash to enhance its current selection of juices and packaged fresh foods.
Bolthouse Farms offers its customers various natural beverages, including carrot juice, strawberry banana smoothie, protein mocha cappuccino and antioxidant-rich juice. It was founded in 1915 in Grant, Michigan and nearly a century later its headquarters is based in Bakersfield, California.
In order to strengthen its juice business, the New Jersey-based Campbell Soup Company has agreed to acquire Bolthouse Farms, the largest producer of carrots in the United States, for about $1.55 billion in cash. Since its beverage division accounts for 10 percent of its sales, including its popular V8 juice brand, it is expected its sales will certainly receive a boost.
Furthermore, the Bolthouse acquisition will allow Campbell to expand into the $12 billion packaged fresh foods market.
“Bolthouse is a great strategic fit with Campbell. Its business platforms, capabilities and culture are well aligned with the core growth strategies we announced last year,” said Denise Morrison, Campbell's President and Chief Executive Officer, in a press release. “Its strong position in the high-growth packaged fresh category complements our chilled soup business in North America, and offers exciting opportunities for expansion into adjacent packaged fresh segments that respond directly to powerful consumer trends.”
In the end, Campbell expects the purchase of Bolthouse will add between $0.05 and $0.07 per share to its annual net earnings.
The deal will be funded through short- and long-term borrowing measures. The acquisition transaction is expected to be completely closed by the end of the summer.
For the fiscal year ending Mar. 31, Bolthouse reported sales of $689 million, while Campbell maintained revenues of more than $7.7 billion. Campbell has 17,500 employees. During Monday’s opening trading session, Campbell’s shares were down $0.08 to $32.91.