Dole Food Company owner David Murdock is taking the company public for the third time with plans to offer up to US$100 million (£779.5 million) worth of shares on the stock market.
The move comes just months after Murdock reportedly made a US$74 million (£57.6 million) settlement with former shareholders who were suing him for allegedly undervaluing the share price when Dole went private in 2013.
Murdock took the company private at a price of US$13.50 (£10.52)per share, but in 2015 a Delaware court estimated the fair value of the shares should have been US$16.20 (£12.63) at the time. Murdock and another executive were ordered to pay US$148 million (£115 million) in damages.
In a filing with the Securities and Exchange Commission (SEC) on April 24, the company said it intended to use the proceeds from the initial public offering (IPO) to repay debts, and possibly for “corporate purposes” if there are extra funds remaining.
“We do not anticipate paying dividends on our common stock in the foreseeable future,” the company added.
Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank, Pierce and Fenner & Smith Incorporated are among the underwriters of the offering.
In the filing, which did not specify exactly how many shares would be offered or at what price, the company highlighted some of its developments since the fresh produce group went private four years ago.
“Since going private, we have undertaken significant cost savings measures and divestment of non-core assets,” the company said.
“We have also made significant improvements across our global supply chain, particularly in the form of farm acquisitions and the delivery of three new West Coast vessels.
“The acquired farms have increased our owned acreage by approximately 20%—primarily in Latin America.”
The multinational said an increase in company-produced volume has helped it improve its negotiating position with independent growers.
“In addition, the new acquisitions have added to our overall product diversification strategy, as they include organic pineapple farms in Costa Rica and a diversified fresh fruit farm in Chile,” the filing said.
“As of March 25, 2017, we owned and operated approximately 124,000 acres of farms and other land holdings around the world, including approximately 14,800 acres of actively marketed idle land for sale in Oahu, Hawaii.
“In addition, we own a fleet of 15 refrigerated ships, 13 of which are dedicated to our operations, operate approximately 15,600 refrigerated containers and utilise six salad manufacturing plants.”
The company said that by maintaining control of the supply chain, it is better equipped to protect products from handling damage, maintain optimal shipping temperatures and better control the timing of product distribution.
“We believe our leading brand position and integrated supply chain create a reliable business model that will deliver consistent, strong financial results,” the filing said.
Despite these developments, and a very strong revenue of US$4.5 billion (£35 billion) for the 2016 fiscal year along with an adjusted EBITDA of US$215.6 million (£168 million), the company recorded a net loss of US$23 million (£17.9 million) for the period.
The company has more than 180 products in its portfolio, grown and sourced from approximately 20 countries and distributed and marketed to more than 75 nations worldwide.
The company highlighted MarketLine research from 2015 which valued sales in the U.S. and European fresh fruit and vegetable markets at US$115 billion (£89.6 billion) and US$277 billion (£216 billion) respectively. This and other consumption trends bode well for fresh produce suppliers like Dole.
“The worldwide fresh produce industry exhibits consistent underlying demand and favorable growth dynamics,” the company said.
“In recent years, the U.S. fresh produce market has increased faster than the rate of population growth, supported by ongoing trends, including greater consumer demand for healthy, fresh and convenient foods and greater emphasis among retailers on fresh produce as a differentiating factor in attracting customers.
“Internationally, we believe there are significant opportunities, particularly in developing markets where annual per capita consumption of fruit and vegetables currently lags behind that of the developed world.”