WhiteWave Foods, the US business behind brands including Horizon Organic and Alpro, has struck a deal to buy local organic food group Earthbound Farm for around US$600m.
Earthbound Farm, which is expected to generate $500m in sales in 2013, is owned by shareholders including US private-equity firm Kainos Capital, as well as Drew and Myra Goodman, the owners of the company.
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WhiteWave, formed last year when US dairy giant Dean Foods spun off its soy and organic products arm, said it would pay for Earthbound Farm in cash.
It said Earthbound Farm was the “largest organic produce brand in North America”. Earthbound Farm produces products including packaged salad, organic fresh fruits and vegetables, frozen fruits and vegetables, and dried fruits and snacks.
“It is a natural extension of our business that reaffirms WhiteWave’s leadership in the organic foods and beverages industry in North America,” WhiteWave chairman and CEO Gregg Engles said.
“Fresh foods are one of the most attractive, emerging trends in the food industry today and the market for organic products continues to grow steadily. With Horizon Organic and Earthbound Farm, WhiteWave will now provide the two most popular gateways for consumers to enter into the organic category – produce and dairy.”
Engles said the deal is expected to be “accretive” to earnings per share in the first year after close.
Drew Goodman, who founded the business three decades ago, said WhiteWave would help Earthbound Farm fulfil its “mission” of bringing “the benefits of organic food to as many people as possible”.
Goodman added: “We both believe that WhiteWave continues to be a leader in improving how food is produced and will help Earthbound Farm achieve its original mission and reach its full potential. We’re excited for the future of Earthbound Farm and the opportunity to join the WhiteWave family.”
