(May 27) IRWINDALE, Calif. — The nation’s third- and fourth-largest producers of bagged salads plan to merge their fresh-cut operations in a deal they say will create a stronger rival to Fresh Express and Dole Fresh Vegetables Inc.

Ready Pac Produce Inc. and Tanimura & Antle Inc., Salinas, signed a letter of intent in late May to merge Tanimura & Antle’s Salad Time retail and foodservice fresh-cut salad business with Ready Pac’s operations.

It would create a company called Ready Pac Foods and leave Tanimura & Antle independent to focus on its fresh vegetable commodity growing and marketing programs.

The deal, which is expected to close by Aug. 1, is subject to approval by regulatory agencies and the boards of both companies.

“We’re complementary companies,” said Rick Antle, chief executive officer of Tanimura & Antle. “They are known for cutting edge technology and innovative products, and we’re known for our high quality products and our growing capabilities. ... What will set us apart is the diversity of products we have.”

Diversity of products could be an important factor for the new company, as the No. 1 and No. 2 bagged salad companies each claim about 40% of the market.

Recent ACNielsen figures, which put the market shares of Dole and Fresh Express at 40% and 38%, respectively, show that Ready Pac has 5% and Tanimura & Antle has 2%, said Eric Schwartz, president of Dole Fresh Vegetables, Salinas. But Ready Pac offers more just bagged salads. It also offers Bistro To Go salad bowls that have separate chambers to hold additional ingredients, including meat.

Bill Zinke, vice president of marketing for Ready Pac, said one of the greatest strengths of the merger will be the combination of branded salads and private-label offerings.

“Both Ready Pac and Salad Time do a fair amount of private-label business,” Zinke said. “When you look at total numbers, the new entity will have a larger share of the branded business and private label.”

The company also offers fresh-cut fruit and fresh-cut vegetables. Ready Pac also has a lot of foodservice, institutional and private-label business, all of which will continue to be important growth areas after the merger, said Ken Silveira, president of Tanimura & Antle.

Antle declined to delineate the financial arrangements of the merger but said the Tanimura and Antle families will get equity in the new company and that he will join the Ready Pac board of directors.

Under the deal, Ready Pac will get the four Tanimura & Antle-owned fresh-cut processing facilities in Salinas; Montreal; Jackson, Ga.; and Plymouth, Ind. This builds on the Ready Pac facilities in Irwindale; Florence, N.J.; and Franklin Park, Ill., giving the merged company greater geographical reach as well as the additional production facilities.

“There’s no duplication there,” Antle said. “Capacity constraints will be minimized. Regional coverage will be increased.”

In addition to the seven facilities currently owned by Ready Pac and Tanimura & Antle, the merged company additionally have operations in several other regions through Ready Pac partners, Zinke said.

Those partner facilities include two more in New Jersey, one in Fort Worth, Texas, another in Montreal and one in Belle Glade, Fla., that doesn’t produce finished products but processes raw products, he said.

Another benefit to the merger is that it gives Ready Pac additional West Coast facilities that can handle the bulky, heavy foodservice packs, Silveira said.

Additional foodservice capabilities, particularly in fresh-cut fruit, could be a major benefit for Ready Pac out of the merger, Silveira said.

“One area that Ready Pac has not done much in is fresh-cut fruit for foodservice,” Silveira said. “That’s an opportunity to expand. We’ve done fruit out of Indiana, and we hope to leverage that.”

Zinke said Ready Pac is the largest supplier of fresh-cut fruit to retail in the country. After the merger, the company will look at ways of leveraging that success into the foodservice arena, he said.

“We’ve dabbled in fresh-cut fruit at foodservice,” Zinke said. “Expanding on that and building on our foodservice operations in general will be another important opportunity. We can look at opportunities at quick serve as well as broadliners for fruit.”