Shareholders of the San Juan Batista, Calif.-based Earthbound Farm agreed to sell the business to WhiteWave Foods for $600 million in cash. The deal is expected to close in the first quarter of 2014.
Charlie Sweat, chief executive officer at Earthbound, said the organic salad and vegetable company will be maintained as a separate business entity after the deal closes, with headquarters and administrative staff to remain in San Juan Batista. No operational changes are anticipated, according to Earthbound and WhiteWave officials.
“We are most excited about the alignment of WhiteWave’s strategy of healthy food and a healthy planet,” Sweat said Dec. 10.
Sweat said the new ownership should enable Earthbound to continue its core mission while allowing it to reduce the premium prices associated with organic products.
Earthbound co-founder Drew Goodman said in a news release issued jointly by the companies that WhiteWave will help Earthbound reach its full potential. Goodman started Earthbound on a 2.5-acre plot in 1984. Today it owns and contracts more than 50,000 acres with more than 200 growers participating.
Earthbound’s CEO said the sale of the company was a natural business progression. The Earthbound owners, which include Dallas-based investment firm Kainos Capital, put the company up for sale in June with Barclays hired to handle the offering.
Sweat said there was “enormous interest.”
However, in October, the New York Post reported the sale was off because of a lack of a buyer. Sweat declined to comment on such media reports. He said there were “a handful of buyers” in the mix by late fall, with WhiteWave offering the best deal.
WhiteWave CEO Gregg Engles said in a conference call on Dec. 9 that the addition of Earthbound’s products will mean WhiteWave has the top two organic categories.
“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.
Engles also cited statistics about Earthbound's market share, saying that the company is the top organic produce company in the U.S. The stats Engles mentioned included: