Dole Food Co., Westlake Village, Calif., on Aug. 14 filed plans for an initial public offering (IPO) of stock to raise up to $500 million.
The formerly public company has been closely held by investor David Murdock since he took it private in 2003. With 2008 net revenues of $7.6 billion, it claims to be “the world's largest producer and marketer of high-quality fresh fruit and fresh vegetables, and is the leading producer of organic bananas.” The company also markets a growing line of packaged and frozen foods. It's No. 14 on the Food Processing Top 100 list of the largest food processors in the U.S. and Canada.
“The offered shares will include shares to be newly issued by Dole as well as shares to be sold by the sole current stockholder of the company,” read a company statement. “The number of shares to be offered, the allocation of shares to be sold as between Dole and its sole stockholder and the price range for the offering have not yet been determined. Dole expects to use the net proceeds it receives from the offering to pay down certain indebtedness, and the remaining net proceeds, if any, for general corporate
purposes.”
The actual date of the IPO is not known. Dole intends to apply to list the common stock on the New York Stock Exchange under the ticker symbol DOLE. Debt apparently remains a critical issue for the company. The Wall Street Journal reported the company owes about $2.06 billion and warned that it may not be able to generate sufficient cash flow to service its loans. But in an Aug. 4 quarterly financial report, Pres./CEO David DeLorenzo said the company “succeeded in reducing its net debt by $145 million during the second quarter and by $480 million, or 20 percent, over the last five quarters.”
The Dole filing is another good sign for the stock market. Dole’s filing joins about a half-dozen others in August, “more than in previous months and a sign that companies are more confident about coming public,” the Journal reported.
The company’s prepackaged foods, such as salads and fruit bowls, are growing the fastest and tend to have the highest profit margins, reported the Journal, so Dole plans to continue to invest in this area, according to its prospectus. The newspaper also noted Dole has a well-known brand name and top market share in developed nations and is aiming to expand more in faster growing areas such as China and Eastern Europe.
