Dole plc Announces Sale of Progressive Produce to Arable Capital
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Insights
The divestiture of a 65% equity stake in Progressive Produce by Dole to PTF Holdings for $120.25 million represents a strategic realignment of Dole's business portfolio. This transaction is particularly significant as it involves a substantial cash inflow, which Dole plans to allocate primarily towards debt reduction. The financial implications for Dole include an immediate liquidity boost and an improved debt-to-equity ratio, enhancing the company's financial health and potentially its credit rating. Furthermore, the sale indicates a sharpening of Dole's focus on its core operations, which may lead to improved operational efficiencies and profitability in the long run.
From an industry perspective, the transaction underscores the ongoing consolidation trend within the agricultural sector, where companies are seeking to optimize their asset base in response to competitive pressures. For stakeholders, the immediate benefit lies in Dole's strengthened balance sheet, while the long-term impact could manifest in more streamlined operations and strategic growth initiatives. However, divestitures also carry risks, such as the loss of revenue streams and market share, which must be managed by ensuring that remaining business segments can compensate for this divestment.
Examining the sale of Progressive Produce to Pacific Trellis Fruit's parent company from a market dynamics standpoint, the deal reflects Dole's intention to refine its market strategy and concentrate on areas with the highest growth potential. Progressive Produce, with its substantial annual sales, has been a significant player in the produce sector. Its integration with Pacific Trellis Fruit could create a more formidable entity in the market, with potential economies of scale and an expanded distribution network.
For the broader produce industry, this deal may signal an increased appetite for mergers and acquisitions, as companies strive to achieve scale and diversify product offerings. The retention of Progressive Produce's management team and their ownership stake is a strategic move to maintain operational continuity and leverage existing expertise. Stakeholders should monitor how this consolidation affects market competition and whether it leads to enhanced product offerings and services.
From an economic standpoint, the divestiture of Progressive Produce reflects a reallocation of capital within Dole's operations, which can be seen as a move towards optimizing the company's capital structure. By reducing debt, Dole is likely aiming to decrease its cost of capital, which can enhance shareholder value over time. This decision may be influenced by the current economic climate, where interest rates and financial market volatility play crucial roles in corporate finance strategies.
The sale's timing, expected to close in March 2024, suggests a deliberate approach to executing the transaction, potentially aiming to capitalize on favorable market conditions or tax considerations. The impact on the labor market and regional economy, particularly in Los Angeles where Progressive Produce is based, will depend on the new ownership's operational decisions. If the transition leads to increased efficiency and growth, it could have a positive economic effect locally and within the agricultural sector.
Progressive Produce, located in
Progressive Produce is a subsidiary of Dole plc and is part of the Diversified Fresh Produce –
Post the completion of this transaction, the existing management team of Progressive Produce will remain with the enlarged business of Progressive Produce and Pacific Trellis Fruit and retain an ownership stake.
The transaction is expected to close in March 2024, subject to the satisfaction of customary closing conditions. Net proceeds from the sale received by Dole are currently expected to be used primarily for debt reduction.
Commenting on the transaction, Carl McCann, Executive Chairman of Dole plc, said:
“We are pleased to announce the sale of our equity interest in Progressive Produce to Arable Capital Partners. Since our initial investment in 2016, the business has been a strong performer within our Group.
We would like to thank the current and former management teams for their dedication, passion, and significant contributions to the growth of this business over the time that we have been partners. We wish the executive team and their new majority owners continued success for the future.
The proceeds from this sale will further strengthen our financial position and enhance the Group’s focus on, and investments in, our core activities.”
Commenting further on the transaction, Derek Yurosek, Managing Director of Arable Capital Partners, said:
“Arable is thrilled about the opportunity to partner with Progressive Produce. The Company is a leader in top produce categories and has an impressive and diversified customer base, as well as an exceptional team. We look forward to helping Progressive Produce continue to deliver outstanding products and service to its retail, wholesale, and foodservice customers.
While Progressive Produce and Pacific Trellis Fruit will continue to operate independently, we are excited about the chance for them to work together to continue to grow their businesses and ultimately bring even greater value to their grower partners and customers. This is a fantastic outcome for everyone involved.”
Progressive Produce was advised by Montminy & Co. as financial advisor and Greenberg Traurig, LLP as legal advisor. PTF Holdings and Arable were advised by K&L Gates, LLP as legal advisor.
About Dole plc:
A global leader in fresh produce, Dole plc grows, markets, and distributes an extensive variety of fresh produce sourced locally and from around the world. Dedicated and passionate in exceeding our customers’ requirements in over 75 countries, our goal is to make the world a healthier and a more sustainable place. For more information visit our website at www.doleplc.com.
About Arable Capital Partners:
Arable Capital Partners is a leader in sustainable food and agribusiness investing and partners with businesses and owners across the food value chain. Arable currently has five platform investments, including Pacific Trellis Fruit, organicgirl, Royal Ridge Fruits, Blazer Wilkinson Gee and Laurel Ag & Water. For more information about Arable visit its website at www.arablecp.com.
Forward-Looking Statements
Certain statements made in this press release that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on management’s beliefs, assumptions, and expectations of Dole’s future economic performance, considering the information currently available to management. These statements are not statements of historical fact. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive,” “target” or similar words, or the negative of these words, identify forward-looking statements. The inclusion of this forward-looking information should not be regarded as a representation by Dole or any other person that the future plans, estimates, or expectations contemplated by Dole will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Dole’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause Dole’s actual results to differ materially from those indicated in these statements. Factors that could cause or contribute to such differences include (i) the parties’ inability to close the transaction in a timely manner or at all due to the failure to satisfy conditions to the closing, including the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (ii) uncertainties as to the timing of closing the transaction, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreement relating to the transaction, (iv) risks related to disruption of management’s attention from Dole’s ongoing business operations, (v) the effect of the announcement or pendency of the transaction on Dole’s relationships with its customers, operating results and business generally, (vi) the outcome of any legal proceedings to the extent initiated against Dole, Fresh Express, Chiquita Holdings or others related to the transaction, (vii) the ability of Dole to execute on its strategy and achieve its goals and other expectations after the closing, (viii) legislative, regulatory and economic developments and (ix) those other matters disclosed in Dole’s filings with the
Category: Financial
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227035848/en/
Investor Contact Dole plc:
James O’Regan, Head of Investor Relations
investors@doleplc.com
+353 1 887 2794
Media Contact Dole plc:
Brian Bell, Ogilvy
brian.bell@ogilvy.com
+353 87 2436 130
Source: Dole plc
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