Campbell Soup Adds Bolthouse Farms Brands

Food products giant Campbell Soup Co. (NYSE: CPB) said this morning that it would acquire fresh food processor Bolthouse Farms from private equity firm Madison Dearborn Partners LLC for $1.55 billion in an all-cash deal. Bolthouse makes a variety of fresh food products and premium beverages.

Campbell said it would operate Bolthouse as a separate business unit, and expects the acquisition to create “one of the industry’s largest healthy beverage platforms, with annual sales of approximately $1.2 billion” when added to Campbell’s ‘V8’ product line. Bolthouse brands include Bolthouse Brands, Earthbound Farms, and Green Giant. The company also offers private label branding.

The acquisition is expected to close in the late summer, and Campbell expects it to add $0.05-$0.07 to adjusted EPS in fiscal 2013. That addition includes the suspension of Campbell’s strategic share buyback plan. For the current fiscal year, Campbell expects to meet its current guidance, excluding costs incurred as a result of the acquisition.

The current consensus estimate for Campbell’s 2012 EPS is $2.40 is about -5.5% below 2011 EPS of $2.54. The company has said EPS will be near the lower end of its forecast -7% to -9% range.

Campbell’s shares are inactive in the pre-market, and closed at $32.99 on Friday, in a 52-week range of $29.69-$35.02. Investors see this as a sideways move at best, at least at first blush.

Paul Ausick