Dole Finds New Home in Complex Merger

 Fruit and vegetable grower Dole plc held an initial public offering in July, yielding a lower-than-expected $400 million in fresh capital for the recently merged company. 

The latest iteration of the Dole company, now headquartered in Dublin, is the result of a merger announced in February between Dole Foods in Westlake Village and Total Produce in Ireland. Its U.S. headquarters is now in Charlotte, North Carolina. 

Total Produce was Europe’s largest fresh produce company and acquired a 45 percent share in parent company Dole Holdings in 2018. The merger, completed in July, made Dole plc the world’s largest fresh produce company.

The two companies had combined revenues for 2020 of $9.7 billion. With such high revenues, Dole plc estimates it is at least twice as large as its nearest competitor, according to a company statement.

The July IPO is the third time Dole has gone public. Billionaire and former chief executive David Murdoch privatized the company formerly known as Dole Food Co. in 2003, then took it public in 2009 and reprivatized it in 2013. 

“In Dole plc, we are positioning our business to fully harness the great and growing potential of our extraordinary industry,” Chief Executive Rory Byrne said in a statement the day of the IPO. 

Byrne, previously held the chief executive position at Total Produce. Johan Lindén, former chief executive of Dole Food, is now the chief operating officer at the new company.

Underwhelming debut

The company originally set out to raise at least $500 million in the IPO, expecting a $20 to $23 per share price range, but was forced to cut the range to $16 to $17 prior to the offering as the company struggled to compete for investor attention. Dole upped the number of offered shares just two days prior to the IPO in an attempt to hit its target of $500 million, ultimately falling short. 

The company announced an IPO price of $16, but trading started at $15 on July 30. Only 25 million of the planned 30.3 million new shares were sold and share prices slid to $14.68 the day of the debut. The stock price fell more than 10 percent in the following months. Shares of Dole reached a peak of $16.27 by Sept. 30, but have largely trended downward since the end of summer, hitting $12.86 on Dec. 1. 

Despite the current slump, executives from Total Produce and Dole believe the new company is poised for long-term success.

“The combined company will become the largest global player with over 170 years of history in fresh produce in both companies, a highly diversified portfolio, resilient earnings and a strong balance sheet that positions us well for accelerated growth,” Carl McCann, chairman of Total Produce, said in a statement when the merger was announced. “We look forward to beginning this next chapter.”

Both Dole and Total Produce were founded in the 1850s with business now focused in North America and Europe. With a history rooted in pineapple plantations, Dole products are sourced, grown, processed, marketed and distributed in 80-plus countries. More than 300 items are produced by Dole or its associated producers and marketed under Dole and other brand names to supermarkets, mass merchandisers, wholesalers and foodservice operators. 

“As a result of the company’s increased footprint and brand strength, it expects to deepen market penetration, expand into attractive product categories, utilize a larger network of relationships across customers, distributors, suppliers and shippers, and enhance its ability to capitalize on an enlarged opportunity set in the produce industry,” read a company statement.