Dole Near to Completing $1.7 Billion Sale
Dole Food Company expects the sale of its worldwide packaged foods and Asia fresh businesses to ITOCHU Corporation for $1.685 billion in cash to be completed in early 2013. The sale transaction is still awaiting Chinese regulatory approval, with the required regulatory approvals from the other six countries involved already received.
Following the sale to ITOCHU, the new look Dole will have a smaller footprint with two lines of fresh produce businesses – fresh fruit and fresh vegetables. The Dole operations will no longer include the worldwide packaged foods and Asia fresh businesses, resulting in overall revenue for the new Dole in the approximate $4.2 billion range with revenue from its fresh fruit business line being reduced in size by approximately 30%.
Dole is currently finalising deals with four of its banking partners for a new $400 million term loan and a $300 million revolving credit facility, to be implemented upon completion of the sale transaction. The $400 million term loan, together with substantially all of the proceeds from the sale transaction, will allow the US-based group to pay off its existing indebtedness of approximately $1.7 billion, and will provide needed funding for transaction-related taxes, costs and expenses, extinguishment of all or part of its long-term Japanese yen hedges, the anticipated right-sizing of the new Dole and other post-closing restructuring expenses, and possible resolution of the previously disclosed Honduras tax case, European Union Antitrust Inquiry and the DBCP cases.
Upon completion of the sale transaction, Dole’s resulting net leverage ratio will be approximately 1.8x (based on the new net debt level and 2013 projected adjusted EBITDA of the new Dole).
