Dole Shares Volatile as Investors Digest Upper Level Mgmt Changes
Dole Food Company, Inc. (NYSE: DOLE) announced that it has moved much closer to completing the sale of its worldwide packaged foods and Asia fresh businesses to ITOCHU Corporation for $1.685 billion in cash, with stockholder approval of the sale at today's special meeting of stockholders held at the Dole headquarters in Westlake Village, California. The transaction has already received required regulatory approval in six of seven reviewing countries, and both Dole and ITOCHU are continuing to work toward consummating the sale by December 31, 2012, subject to final regulatory approval from China.
The consummation of the sale will result in a substantial portion of Dole's operations being sold to ITOCHU, with the new Dole having a smaller footprint with two lines of fresh produce businesses: fresh fruit and fresh vegetables. The Dole operations will no longer include the worldwide packaged foods and Asia fresh businesses, resulting in overall revenue for the new Dole in the approximate $4.2 billion range with revenue from its fresh fruit business line being reduced in size by approximately 30%.
Dole will be putting in place a new capital structure at the time of consummation of the sale which, together with substantially all the proceeds from the sale transaction, will be used to pay off existing indebtedness and to provide funding for transaction-related taxes, costs and expenses, the possible settlement of some or all of Dole's long-term Japanese yen hedges, anticipated post-closing restructuring expenses and other corporate purposes. It is expected that the new Dole will benefit from a significant reduction in interest expense and a substantially reduced leverage ratio on a going forward basis.
Dole also announced planned leadership changes in connection with the sale transaction. Mr. Murdock will return to the role of Chairman and Chief Executive Officer, and C. Michael Carter will assume the added role of President and Chief Operating Officer with all operating and corporate functions reporting to him. Mr. Carter will also be rejoining Dole's board. In addition, Keith C. Mitchell, current chief financial officer of Dole's North American Fresh Fruit business, will become Chief Financial Officer; A. Charlene Mims, currently responsible for benefits and payroll, will lead Human Resources; and both Beth Potillo, current Treasurer, and Yoon J. Hugh, current Controller and Chief Accounting Officer, will become Senior Vice Presidents with added responsibilities.
As part of the transition, David A. DeLorenzo, current President and Chief Executive Officer, will be joining ITOCHU to lead the newly acquired Asia fresh and worldwide packaged foods businesses, and will be leaving Dole's board. Joseph S. Tesoriero, current Executive Vice President and Chief Financial Officer, and Sue Hagen, current Senior Vice President Human Resources, will be leaving Dole in connection with the sale transaction.
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