Bolthouse Farms, which pioneered the baby carrot sector, will continue to operate as a separate business unit while diversifying the Campbell’s portfolio to include fresh produce.
The Camden, N.J.-based Campbell company signed an agreement July 9 to pay $1.55 billion in cash to a fund managed by Madison Dearborn Partners LLC, the Chicago private equity firm that bought Bolthouse in 2005 for $1.1 billion, according to Campbell’s officials.
Jeff Dunn, president and chief executive officer of Bolthouse, remains at the helm of the Bakersfield, Calif., company, according Campbell’s. He will report directly to Campbell’s chief executive Denise Morrison.
“Campbell’s is truly an iconic American company,” Dunn said. “We are thrilled to have such a strong parent.”
Carrots — baby and full-sized — make up about half of Bolthouse’s business while its juices account for about 35%. Bolthouse had sales of $689 million during its fiscal year, which ended March 31.
Dunn said the company’s fresh packaged items, such as the carrots featured in its “Eat ‘em like junk food” campaign were the primary reason Campbell’s was interested in buying Bolthouse. He said it is a way for Campbell’s to extend its reach out of the center-store categories.
Courtesy Bolthouse Farms“Our fresh packaged (products) were absolutely at the center of the deal,” Dunn said. “We are reviewing those right now and plan to do some additional things with the (Eat ‘em like junk food) campaign later this year, but we aren’t ready to talk about that publicly yet.”
The campaign launched in late 2010 and ran for a few months, Dunn said, until excessive rains in growing regions resulted in supply issues. Even with that interruption, Dunn said the campaign is still part of the Bolthouse marketing effort. It won gold, silver and bronze awards at the 44th annual North American Effie Awards for marketing in May.
Dunn said he and other Bolthouse officials decided “four or five months ago” to engage Campbell’s in talks.
“Three years ago was too early,” Dunn said. “The timing was right now. They are buying us as a platform and investing in us to accelerate growth.”
During a conference call with investors and media on July 9, Morrison said Bolthouse appeared on the soup company’s radar about three years ago, but the company was not for sale then. Campbell’s already had a relationship with Bolthouse because the California company supplies carrots for Campbell’s soups and juice products, including V-8.
Anthony Sanzio, a Campbell’s spokesman, said July 9 that the soup giant plans to introduce fresh packaged products such as dips and salsa, and the Bolthouse name will help them in those efforts.
“One thing that made Bolthouse so attractive to Campbell’s is their strong branded presence in the fresh produce department,” Sanzio said. “We envision that helping us with new products in the fresh packaged sector.”
Reuter’s news service reported the bidding process was competitive, with rival bidders including private equity companies Blackstone Group LLP and Ares Private Equity Group, as well as Earthbound Farm, San Juan Batista, Calif. Officials at Earthbound Farm did not respond to calls for comment.
Dunn said he could not comment on who the other bidders were, but he did confirm that Campbell’s was not the only interested party.
Morrison said Campbell’s expects the deal to close in late summer. Multiple financial media outlets reported that for the fiscal year ending March 31, Bolthouse had sales of $689 million and earnings of $92 million before interest and taxes.
Bolthouse was founded in 1915 when the Bolthouse family began commercial vegetable growing in Michigan. The company has 2,100 employees.