August 14, 2009 / 1:24 PM / in 10 years

Fruit producer Dole Food files for $500 million IPO

BANGALORE/NEW YORK (Reuters) - Dole Food Co Inc, the world’s largest producer of fresh fruits and vegetables, filed with U.S. regulators on Friday to raise up to $500 million in an initial public offering of common stock.

Dole, founded in 1851, intends to list its common stock on the New York Stock Exchange under the symbol “DOLE” and use proceeds to pay down debt and for other corporate purposes.

For the first half of 2009, the company’s sales fell 11.1 percent to $3.3 billion and profits slid 18.3 percent. It had 2008 revenue of $7.6 billion and net income of $123 million.

Rival Chiquita Brands International Inc CQB.N had revenue of $3.6 billion and a net loss of $323.7 million in 2008, while Fresh Del Monte Produce Inc (FDP.N) had revenue of $3.53 billion and net income of $157.7 million.

Jefferies & Co analyst Scott Mushkin said given the company’s dominant market share and the nature of its business, there should be enough investor appetite for its shares at a decent price.

“Their earnings are volatile. But these companies tend to dominate the businesses they are in. Dole’s got the No. 1 share in the banana business and No. 2 in the bag salad business.”

Scott Sweet, senior managing partner at advisory firm IPO Boutique, said despite Dole’s results so far this year, its strong brand recognition around the world should drum up interest in the IPO.

“Their numbers show a dramatic fall in revenue and that goes against the recent trend in IPO when revenue growth has been a requirement,” Sweet said.

But companies with high brand awareness and international and domestic appeal have generally done well, he added, pointing to the IPO by language training software maker Rosetta Stone Inc (RST.N), whose stock has been a top performer among IPOs in 2009.

BUSY IPO WEEK

The filing comes on the heels of several high profile and large IPO filings in recent weeks as private equity firms and private investors seek to take advantage of improving capital markets and a recovering IPO market to unload portfolio companies.

In recent weeks, several brand name companies including VS Holdings, the parent of Vitamin Shoppe chain, and Hyatt Hotels Corp have filed for sizable IPOs.

This week was the busiest week for U.S. IPO activity since April 2008, with three IPOs totaling $1.2 billion, according to Thomson Reuters data.

A prospectus filed with the U.S. Securities and Exchange Commission did not reveal how many shares the company planned to sell or their expected price.

Investor David Murdock bought a controlling interest in Dole’s predecessor company, Castle & Cooke Inc, in 1985, and became chairman and chief executive. The company changed its name to Dole in 1991 and divested most of its real estate holdings in 1995, according to the securities filing.

In 2003, Murdock, who is listed in the filing as owning all of Dole’s common stock, took Dole private in a deal valued at $2.5 billion.

The company said Goldman Sachs & Co, BofA Merrill Lynch, Deutsche Bank and Wells Fargo were underwriting the IPO.

Additional reporting by Brad Dorfman in Chicago and Dhanya Skariachan in Bangalore; Editing by Derek Caney, Steve Orlofsky and Anil D'Silva

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below