Company of the Month January 2018: Total Produce

Pictured: Phil Hogan, European Commissioner for Agriculture and Rural Development, with Rory Byrne, CEO, Total Produce.

Total Produce’s continued acquisition strategy strengthens their North American presence.

It was a transformational move when Total Produce snapped up a 45% holding in Dole, the biggest banana distributor in North America in January.

The Dundalk-headquartered company, listed on the Irish and London stock exchanges, is quietly dominating its industry, as one of the world’s largest fresh produce providers. The food distributor – which was spun out of Fyffes in 2007 – operates out of 26 countries with a global infrastructure of 138 facilities worldwide. They distribute over 350m cartons of fresh produce annually.

The deal with Dole is currently based on a $2bn valuation, with Total Produce paying $300m for a 45% stake, but entitles Total Produce to take another 6% of Dole for a total of US$12 million. There is a strong likelihood that they could go for the whole business within the next couple of years, with an option to buy the outstanding 49% for anything between US$250 million and US$450 million, depending on Dole’s performance. Dole had $1.25bn of net debt at the end of 2016.

At the forefront of their industry

In a statement Total Produce said the move represented a “significant step in the history of Total Produce and a continuation of its expansion strategy.”

Commenting on the acquisition, Carl Mc Cann, Chairman of Total Produce, said: “We are delighted to have signed an agreement with Dole, long held in the highest regard as one of the world’s best fresh produce companies, with iconic brands dating back to 1851.

“I believe that this investment by Total Produce in Dole is the single most positive step in our company’s history.

“It places Total Produce at the forefront of our industry, and we anticipate it will create significant additional value for shareholders in the years ahead.”

Total is a European market leader and becoming a more prominent force in the North American market with 21 facilities there, compared to 106 in Europe, 4 in Asia and 7 in South America.

Acquisition strategy

Acquisitions are a key part of the group’s growth strategy, and 2016 saw them spend over €60m on same. During 2017 Total actively pursued further investment opportunities. Last March they announced the purchase of a further 30% of Canada’s Grandview Ventures Limited (GVL) which trades under the names of the Oppenheimer Group and Oppy, for a consideration of €28.4 million. In addition to the initial 35% acquired in 2013, this brought Total Produce’s shareholding of GVL to 65% after a total investment of €43.4 million.

Also last November they acquired a 50% equity stake in California based fresh produce company, The Fresh Connection, LLC. Founded in 1994 and headquartered in Lafayette, California, the company is one of North America’s premier produce export companies with 2016 sales of c. US$165 million.