WhiteWave Foods signs deal to buy organic food firm Earthbound Farm

US-based WhiteWave Foods has signed an agreement to take over Earthbound Farm, an organic food brand, from its shareholders, led by private equity firm Kainos Capital and Earthbound founders Drew & Myra Goodman in a $600m cash deal.

Earthbound Farm produces a wide range of organic fresh and frozen fruits and vegetables, dried fruits and snacks.

WhiteWave stated that it will finance the deal with borrowings under its existing credit facilities and intends to increase its credit facilities by $500m to support future growth.

The company expects to complete the increase to its credit facilities by the end of this year.

Subject to the receipt of regulatory approvals and certain closing conditions, the acquisition is scheduled for completion during the first quarter of 2014.

JP Morgan is providing financial advisory services to WhiteWave, while Barclays and Houlihan Lokey are acting as financial advisors to Earthbound Farm.

Following completion of the deal, there will be no significant operational changes at Earthbound Farm, which will operate as a separate unit and will be based in San Juan Bautista, California.

The acquired business would allow WhiteWave to achieve approximately $0.07 cents per share to its adjusted net earnings in the first fiscal year.

WhiteWave chairman and CEO Gregg Engles said that 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: "Over the last year, WhiteWave has established a solid foundation and delivered strong financial results as an independent company, and this acquisition will allow us to drive additional shareholder value."

WhiteWave produces plant-based foods and beverages, coffee creamers and beverages, and dairy products under brands including, Silk, Horizon Organic and International Delight.

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Image: The acquisition is expected to close during the first quarter of 2014. Photo: courtesy of Sura Nualpradid atFreeDigitalPhotos.net.