Business

Monday, Jul 09 2012 06:50 PM

Campbell Soup Co. to acquire Bolthouse

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    By Henry A. Barrios / The Californian

    A steady stream of trucks goes in and out of the truck entrance of Bolthouse Farms on Edison Highway Monday.

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    By Henry A. Barrios / The Californian

    Bolthouse Farms carrot operations continued at their East Brundage Lane location Monday as news reports surfaced about Campbell Soup Co.'s plans to buy Bolthouse for $1.55 billion in cash.

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BY COURTENAY EDELHART Californian staff writer cedelhart@bakersfield.com

Bolthouse Farms says the local agribusiness giant's acquisition by Cambden, N.J.-based Campbell Soup Co. won't cost the region any jobs or change how the company operates.

"We couldn't be more excited about having Campbell Soup Co. as our new parent," said President and CEO Jeff Dunn. "All of our conversations have been around leaving us as an autonomous, stand-alone unit of Campbell Soup Co., with opportunities for continued incremental growth."

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BOLTHOUSE FARMS TIMELINE

1915: The Bolthouse family launches a small vegetable farm in Grant, Mich.

1938: William H. Bolthouse takes over his parents' farm and begins adding land.

1972: William H. Bolthouse moves the company to warmer Bakersfield in order to grow and pack carrots year-round.

1985: William H. Bolthouse turns the company over to his son, William J. Bolthouse.

2003: Bolthouse Farms builds a bottling facility and introduces Bolthouse Farms Super Premium Beverages.

2005: The Bolthouse family sells the company to private equity firm Madison Dearborn Partners LLC.

2006: Five people in the United States and Canada are sickened and one person dies during a botulism outbreak related to Bolthouse Farms carrot juice. An investigation later concludes consumers failed to refrigerate it properly.

2007: Bolthouse introduces a line of refrigerated salad dressings. The same year, it lays off 100 workers from its plant on East Brundage Lane.

2008: Californians Against Hate (which has since been renamed Rights Equal Rights) launches a boycott against Bolthouse to protest William Bolthouse Jr.'s $100,0000 donation in support of a state ballot measure banning gay marriage. The boycott is called off a little less than a month later after the company makes a comparable donation to LGBT groups and explains that William Bolthouse Jr. is no longer an owner.

2009: Bolthouse lays off 93 employees.

2010: Bolthouse closes its Buttonwillow carrot processing facility, costing about 200 workers their jobs.

2012: Madison Dearborn Partners LLC agrees to sell to Campbell Soup Co.

-- Sources: Bolthouse website and Californian archives

Campbell Soup will keep Bolthouse's headquarters in Bakersfield, Dunn added, and there are no plans to change the leadership team or eliminate any of the company's 2,100 employees.

Bolthouse's civic and philanthropic involvement in the community also is unlikely to change, Dunn said.

"They've been involved in a lot of redevelopment efforts in Camden," he said. "Their culture is very similar to ours, so I think we'll stay involved in the community and keep doing the things we're doing."

Campbell Soup announced Monday that it has an agreement to buy Bolthouse Farms from Chicago-based private equity firm Madison Dearborn Partners LLC for $1.55 billion in cash.

Campbell said there's no reason to make any drastic changes at Bolthouse.

"It's a well-run organization with a really good management team," said spokesman Anthony Sanzio.

Campbell is a longtime customer of Bolthouse's, and the carrot, juice and salad dressing producer had been on the radar screen of the world's largest seller of soup since Campbell President and Chief Executive Officer Denise Morrison visited three years ago. She made inquiries back then, but was politely told Bolthouse wasn't for sale, Sanzio said.

Madison Dearborn declined to comment on the transaction announced Monday or say why it agreed to sell now.

Bolthouse is a great strategic fit for Campbell, Morrison said.

Campbell is best known for its canned soups, but is looking to strengthen its presence in the refrigerated sections of supermarkets. Most of its products, which include Goldfish crackers, Pepperidge Farm baked goods and Prego pasta sauces, are now found in the center aisles where shelf-stable items are sold.

Morrison said the Bolthouse deal will help Campbell more aggressively court the generation known as Millennials who are especially drawn to healthy, on-the-go foods. Campbell's core customers are currently baby boomers and seniors who grew up with its products, Morrison said.

Campbell expects the $12 billion market for packaged fresh foods to grow about 6 percent to 7 percent a year, outpacing the broader packaged-food category.

Campbell already buys carrots from Bolthouse for its soups and juice concentrates, and plans to operate Bolthouse as a separate business unit. It expects the deal to add 5 cents to 7 cents per share to its 2013 earnings. The acquisition is expected to close late this summer.

Campbell said in May that, even as its U.S. soup sales fell in its fiscal third quarter, sales in its beverage unit rose 5 percent, driven by gains in its V8 Splash and V-Fusion drinks.

Ross Gerber, president and CEO of Gerber Kawasaki Wealth Management in Santa Monica, which follows the food industry, called the acquisition a good move.

"What's happening in the marketplace is food is going healthier and organic," he said. "Campbell makes a lot of old-school products that aren't very good for you. At the same time, produce is a commodity that's in great demand all over the world. Bolthouse is a great asset to own."

Bolthouse Farms had sales of $689 million for the fiscal year ended March 31. Its 27 flavors of juices, smoothies and protein drinks and its 12 kinds of salad dressings are sold under the Bolthouse banner. It sells carrots under the "Earthbound Farms" and "Green Giant" brands.

Carrots account for slightly more than half of Bolthouse's revenue, while drinks and salad dressings make up about a third.

Rival carrot producers said they weren't unnerved by the approach of Campbell.

Grimmway Farms in Lamont "will remain focused on growing and marketing the finest quality carrots and organic vegetables with the passion that you've come to know," Grimmway President Jeff Meger said in an email.

Bob Giragosian, managing partner at Kern Ridge Growers near Arvin, said he did not see the purchase having much of an effect on his business because as far as he knew, Campbell was interested in the salad dressing and juice drink side of Bolthouse.

"Since Campbell's is not in the fresh produce business, we won't see any major changes, certainly not in the near future," he said.

Kern Ice & Cold Storage, a Bakersfield company that has done business with Bolthouse in the past, said the acquisition would benefit Bakersfield.

"It's a big company,"said owner Enrico Mazzie. "I think it could be a good thing in the long run."

Bolthouse was founded in 1915. The Bolthouse family sold it to Dearborn Madison in 2005.

-- Californian staff writer Anna Burleson and the Associated Press contributed to this report.

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