Total Produce to Combine With Dole Food Company and Become Publicly Listed in the U.S.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014.

DUBLIN–(BUSINESS WIRE)–Transaction Highlights:

• Total Produce plc (“Total Produce”), Europe’s leading fresh produce company, Dole Food Company, Inc. (“Dole”), and affiliates of Castle & Cooke, Inc. (the “C&C shareholders”), which own a 55% interest in Dole’s parent company (“Dole Holdings”) (together, the “Parties”), are pleased to announce that they have entered into a binding transaction agreement (the “Agreement”) to combine under a newly created, U.S. listed company (“Dole plc”) (the “Transaction”).
• The Transaction will simplify the existing structure between the two companies by unifying Dole and Total Produce under common ownership, with the objective of enabling full operational integration, realisation of synergies and value creation across the enlarged business.
• Under the terms of the Agreement, Total Produce shareholders will receive 82.5% of Dole plc shares and the C&C shareholders will receive 17.5% of Dole plc shares, in each case based on the fully diluted outstanding shares immediately prior to the completion of the Transaction.
• Dole plc will be the global #1 in fresh produce with estimated combined 2020 revenue of approximately US$9.7 billion, Adjusted EBITDA of approximately US$379 million and total assets of approximately US$4.5 billion¹.
• Dole plc will be well positioned to deliver attractive long-term growth and utilise its increased size and network to drive market penetration and cross-selling. Dole plc will benefit from the strength of the Dole brand to further expand its product offering and pursue synergistic M&A in a fragmented and structurally growing industry.
• Dole plc will have a balanced geographic presence with an extensive and diversified product portfolio, enhancing the overall financial resilience of the business.
• Per the Agreement, Dole plc’s completion of an initial public offering and a listing on a major U.S. stock exchange is a condition for completion of the Transaction (the “IPO”). In connection with the Transaction, Dole plc intends to target raising US$500 to US$700 million in primary equity capital to strengthen and de-lever the combined balance sheet. Upon completion of the U.S. listing of Dole plc, Total Produce will cease to be listed on Euronext Dublin and the London Stock Exchange.
• Supported by the delivery of synergies and improved trading characteristics in the U.S. public market, successful completion of the Transaction is expected to create significant value equivalent to at least €2.15 per Total Produce share (a +46% increase on yesterday’s closing share price²) based on achieving the minimum agreed valuation of US$215 million (as a condition set forth in the Agreement) for the 17.5% stake in Dole plc owned by the C&C shareholders on a fully diluted basis immediately prior to completion of the Transaction³.
• Dole plc, operating under the Dole brand, will be incorporated in Ireland, with its Global Headquarters in Dublin, Ireland. Its headquarters for the Americas will be in Charlotte, North Carolina.
• The highly regarded management teams of Total Produce and Dole, with combined experience of over 150 years in the fresh produce sector, will continue to operate the combined business.
• The Transaction is subject to approval by Total Produce shareholders, regulatory approvals, market conditions and customary conditions⁴.

Commenting on today’s announcement, Carl McCann, Chairman of Total Produce, said:

“I am delighted with this Transaction, which combines two highly complementary premium businesses to create the global leader in fresh produce. I am confident the combined business will open new avenues of value creation for shareholders and pursue innovation in healthy nutrition for our customers worldwide.

“Our intention to list the new company in the United States marks an exciting next step for Dole plc. The combined company will become the largest global player with over 170 years of history in fresh produce in both companies, a highly diversified portfolio, resilient earnings and a strong balance sheet that positions us well for accelerated growth. We look forward to beginning this next chapter and providing increased opportunity for our shareholders, dedicated employees, customers, suppliers and partners.”

This summary should be read in conjunction with the full text of this Announcement.

Rationale for the Transaction:

Simplifies the existing relationship structure between the two companies by unifying Dole and Total Produce under common ownership:

• The combination will allow for full operational integration, realisation of synergies and value creation across the combined business.
• Building on the successful existing relationship between the two companies, the new structure facilitates strategic alignment and operational agility across the whole organization.

Creates potential for significant revenue synergies and cost efficiencies and a platform to pursue growth from a broader set of available commercial opportunities:

• Dole plcexpects to deliver Adjusted EBITDA synergies of between US$30 million and US$40 million over the medium term, largely through revenue expansion and cost optimization opportunities across products, regions, sourcing and supply chain.
• As a result of the company’s increased footprint and brand strength, it expects to deepen market penetration, expand into attractive product categories, utilise a larger network of relationships across customers, distributors, suppliers and shippers, and enhance its ability to capitalise on an enlarged opportunity set in the produce industry.

Strengthens the combined balance sheet, unlocking future organic and development opportunities:

• Per the Agreement, Dole plc intends to target a primary equity capital raise of between US$500 and US$700 million which would significantly de-lever the combined balance sheet with a target of approximately 3.0x estimated combined net debt / Adjusted EBITDA giving effect to the Transaction⁵.
• This strong foundation will allow the company to invest in organic and development opportunities and position it to achieve sustainable long-term growth.

Provides significant value to Total Produce shareholders from Transaction terms, underpinned by the delivery of synergies and improved trading characteristics in a U.S. public market context:

• The Transaction is expected to create significant value equivalent to at least €2.15 per Total Produce share (a +46% increase on yesterday’s closing share price)⁶ based on an agreed floor valuation of US$215 million (as a condition set forth in the Agreement) for the 17.5% stake in Dole plc owned by the C&C shareholders on a fully diluted basis immediately prior to the completion of the Transaction⁷.
• In addition, the Board of Directors of Total Produce believes that there is significant potential for further value creation, assuming Dole plc’s IPO valuation is comparable with relevant industry peers in a U.S. public market context.

Dole plc Business Profile and Growth Opportunity:

Creates the premier global #1 in fresh produce, with an unrivalled footprint and leadership position across attractive categories:

• With estimated combined 2020 revenue of approximately US$9.7 billion, Dole plc estimates it will be approximately two times larger than its nearest competitor. It will have unparalleled leadership in the produce supply chains and end markets.
• Dole plc will have greater specialisation across products, forge deeper relationships with customers and suppliers and avail itself of more operational efficiencies to drive down costs.
• The company will have a well-balanced portfolio with strong leadership positions in stable categories such as bananas, pineapples and fresh vegetables, combined with increased size and presence in attractive growth categories such as soft fruit and avocados, while building its currently strong presence in organic produce.

Enhances overall resilience of the business with complementary core capabilities and highly diversified presence across categories and geographies:

• The combined product portfolio of Dole plc is the most diversified in the produce industry.
• Dole’s global cultivation and iconic Dole brand, a strategic asset which Dole plc will continue to develop, complement Total Produce’s business-to-business brands and on-the-ground capabilities in category management and innovation, delivered from over 160 facilities.
• Total Produce’s strong presence across the European continent complements Dole’s deep heritage in the Americas, resulting in a well-balanced geographic footprint and significantly enhanced global customer insights.

Unlocks potential across the value chain, combining Dole’s vertically integrated business model and asset base with Total Produce’s flexible and agile structure:

• The company will benefit from greater supply chain efficiencies, utilising a highly valuable, strategic estimated combined 2020 total asset base of approximately US$4.5 billion, including significant owned land, vessels, salad manufacturing plants, cold storage facilities and packing houses.
• Dole plc’s global sourcing and shipping networks will provide operating flexibility and product availability throughout the year, utilising own production capabilities and strong supplier relationships.
• As a result of the company’s expanded sourcing and distribution network, Dole plc will have enhanced capabilities to create value from cultivation to market, strengthening and enhancing its partnership with customers.

Benefits from consumer trends towards healthier and more natural foods in a sector well-aligned with ESG themes:

• The fresh produce category provides highly nutritious products and has the lowest ecological, water and carbon footprints compared to other food categories⁸.
• The sector is expected to provide sustainable and highly resilient long-term growth due to increasing demand from environmentally and socially conscious consumers for healthier foods and innovative meal solutions produced more sustainably.
• Both companies have been at the forefront of driving positive environmental and social change across the industry and Dole plc will continue to pursue ambitious 2030 sustainability, economic and social and ethical targets.

Results in a resilient financial profile, with enhanced long-term growth prospects and strong cash flows:

• The Board of Directors of Total Produce believes the company will have long-term organic growth potential of 2%-3% p.a., enhanced further by development opportunities.
• Dole plc’s earnings stability will be supported by increased diversification and an integrated supply chain, with a long-term target to achieve 5%-7% Adjusted EBITDA growth p.a., supported by synergies, efficiencies and development opportunities.
• The company will benefit from strong cash flow generation to fund an attractive dividend pay-out ratio in line with Total Produce’s historical pay-out ratio.

Significant Operating Synergies from the Transaction

The Transaction is expected to generate significant EBITDA synergies of between US$30 million and US$40 million over the medium term from revenue expansion and cost optimization opportunities across products, regions, sourcing and the supply chain.

Product synergies will come from accelerated strategic development of high growth products such as avocados and soft fruit, the promotion of the Dole brand with the Total Produce brands, and the utilisation of existing infrastructure and distribution networks in the key markets of North America and Europe.

Revenue enhancement will come from increased collaboration between Total Produce and Dole in regions such as the UK, France and Spain and further development of the service provision model with key retail customers.

Sourcing benefits will come from collaborative sourcing from key production regions in Chile and South Africa and further coordination of the group’s extensive procurement and supply chain network.

Supply chain benefits include increased collaboration across inland freight and logistics in North America, further development of third-party logistics offerings, as well as a strategic approach to the coordination of global sea freight management.

The synergies described above are beyond and incremental to the collaboration, efficiency and portfolio management initiatives which the two organizations have undertaken since Total Produce’s initial 45% investment in Dole Holdings, which was completed on 31 July 2018⁹. On 29 January 2019, Dole successfully completed the sale of its European salads business for approximately US$50 million. In addition, in an effort to drive cost savings and better align time zones, Dole moved its corporate headquarters from California to North Carolina in 2019. From a commercial perspective, the two organisations have made meaningful progress on efforts to cross-sell fruits and vegetables in the two companies’ respective home markets. In addition, the two organizations have advanced steps to consolidate logistics and procurement functions in select markets such as South Africa, as well as to enhance Dole’s sales function in Europe.

Significant Value Creation Potential

The terms of the Transaction are expected to provide significant value to Total Produce shareholders, supported by synergies and the improved trading characteristics in the U.S. public market. At the Valuation Floor, the terms of the Transaction would imply a value of €2.15 per Total Produce share (a +46% increase on yesterday’s closing share price)¹⁰. The Board of Directors of Total Produce believes there is significant further upside to the value creation potential, assuming that Dole plc can achieve a public trading valuation in line with relevant industry peers.

The table below sets out the calculation of value delivered per Total Produce share based on the terms of the agreed Valuation Floor as set forth in the Agreement.

Floor Value of the C&C Shareholders’ Interest in Dole plc11		$ 215m
Ownership of the C&C Shareholders in Dole plc (Pre Primary Equity Capital Raise)11		17.5%
Implied Dole plc Equity Value at IPO (Pre Primary Equity Capital Raise)		$ 1.2bn
Memo: Implied Dole plc Equity Value at IPO (Post Primary Equity Capital Raise)12,13		$ 1.8bn
Dole plc Shares Outstanding at IPO (Pre Share Consolidation)14		473.5m
Implied Dole plc Price per Share (Pre Share Consolidation)		$ 2.60
EUR/USD Exchange Rate15		1.21
Implied Dole plc Price per Share (Pre Share Consolidation)		€ 2.15
Dole plc Net Debt at IPO (Pre Primary Equity Capital Raise)13,16		$ 1.4bn
Memo: Dole plc Target Net Debt at IPO (Post Primary Equity Capital Raise)12,17		$ 0.9bn
Dole plc Enterprise Value at IPO (Post Primary Equity Capital Raise)18		$ 2.9bn
Implied EV / 2020 Adjusted EBITDA Multiple (Pre Synergies)		7.6x
Implied EV / 2020 Adjusted EBITDA Multiple (Post Synergies)19		6.9x

The Valuation Floor implies a valuation of Dole plc of approximately 7.6x 2020 EV / Adjusted EBITDA (6.9x including synergies), which the Board of Directors of Total Produce believes is meaningfully below the valuation levels observed in public markets for relevant comparable companies.

Transaction Terms, Structure and Timing:

Under the terms of the Agreement, Total Produce and Dole will combine under Dole plc, a newly created and Irish incorporated company which will concurrently seek a listing on a major U.S. stock exchange. Upon completion of the Transaction, existing Total Produce listings on the Euronext Dublin and the London Stock Exchange will be discontinued (the “Delistings”).

Shares in Total Produce will be exchanged for shares in Dole plc through a scheme of arrangement at a fixed exchange ratio, whereby Total Produce shareholders will receive shares in Dole plc for shares held in Total Produce, representing 82.5% of Dole plc shares outstanding on a fully diluted basis immediately prior to the completion of the Transaction. Simultaneously, Dole Holdings will combine with a subsidiary of Dole plc, whereby the C&C shareholders (the owners of the 55% interest in Dole Holdings not currently owned by Total Produce) will receive shares in Dole plc equivalent to 17.5% of Dole plc shares outstanding on a fully diluted basis immediately prior to the completion of the

Transaction. As a result of the merger and related transactions, Dole will become an indirect, wholly owned subsidiary of Dole plc.

Per the terms of the Agreement, immediately following or substantially concurrently with completion of the business combination transactions, Dole plc is required to complete an IPO and a related listing on a major U.S. stock exchange to be determined. In connection with the Transaction, Dole plc intends to raise equity capital with a target amount of between US$500 and US$700 million. Immediately following the Transaction, existing Total Produce shareholders are expected to own approximately 55% of Dole plc on a fully diluted basis and the C&C shareholders are expected to own approximately 10% of Dole plc on a fully diluted basis, with the remainder to be held by investors participating in the equity capital raise²⁰.

With respect to the IPO, the Parties have agreed to the following conditions with the objective to support and protect the value proposition of the Transaction to existing Total Produce shareholders and the C&C shareholders as well as enable the C&C shareholders to realise liquidity for a portion of their holdings in the Transaction:

• The Transaction is subject to the IPO achieving a price per Dole plc share such that the 17.5% of Dole plc shares to be held by the C&C shareholders on a fully diluted basis immediately prior to the IPO have an aggregate value of at least US$215 million (the “Valuation Floor”). The Valuation Floor implies a valuation of Dole plc of approximately 7.6x 2020 EV / Adjusted EBITDA (6.9x post including synergies²¹), which the Board of Directors of Total Produce believes is meaningfully below the valuation levels observed in public markets for relevant comparable companies²².
• Further, the Transaction is subject to the C&C shareholders achieving net proceeds of at least US$50 million in the sale of shares on a secondary basis in conjunction with the IPO (the “Minimum Secondary”). Per the Agreement, further sales of Dole plc shares by the C&C shareholders post completion of the Transaction will be subject to customary lock-up provisions.

The Valuation Floor and Minimum Secondary conditions can be waived by Total Produce and the C&C shareholders by mutual consent at any time prior to completion.

Per the Agreement, the Parties also agreed that upon completion of the Transaction, the capital amount of US$25 million due under the promissory note issued by the C&C shareholders to Dole Holdings shall be deemed satisfied in exchange for equivalent value. The Parties further agreed that Total Produce and the C&C shareholders shall, subject to certain conditions, release each other from existing and future indemnity claims arising from the Initial Transaction.

Completion of the IPO and the business combination transactions to form Dole plc will occur simultaneously and inter-conditionally, subject to market conditions. The scheme of arrangement with respect to the exchange of shares in Total Produce for shares in Dole plc will be subject to the approval of Total Produce shareholders and the approval of the High Court of Ireland. The Delistings will be subject to the approval of Total Produce shareholders. Total Produce shareholders will be asked to vote in favour of the proposed scheme of arrangement, the Delistings and certain related matters (the “Resolutions”) at an extraordinary general meeting of shareholders to be scheduled in due course. The Transaction also remains subject to the Valuation Floor, the Minimum Secondary and regulatory approvals in a limited number of jurisdictions and other conditions and approvals customary to a transaction of this nature. Subject to all other conditions having been satisfied, completion of the Transaction will close at such time as the Board of Directors of Total Produce may determine, provided that if completion has not occurred by 15 November 2021, either Total Produce or Dole may terminate the Agreement on the terms set forth therein.

Should the Transaction not be completed for any reason, the terms of the Initial Transaction (as defined below) will remain in place and Total Produce will continue to be listed on Euronext Dublin and the London Stock Exchange.

Initial Investment in Dole Holdings on 31 July 2018 (the “Initial Transaction”)

On 1 February 2018, Total Produce announced the acquisition of a 45% stake in Dole Holdings from the C&C shareholders for cash consideration of US$300 million (the “First Tranche”), which was completed on 31 July 2018. From and after the closing of the First Tranche, Total Produce has had the right, but not the obligation, to acquire (in any one or more tranches of 1%), at any time and from time to time, up to an additional 6% of the equity interests in Dole Holdings (the “Second Tranche”).

From and after 31 July 2020, Total Produce has had the right, but not the obligation, to acquire the balance of the equity interests in Dole Holdings (the “Third Tranche”), whereby the consideration for the Third Tranche is to be calculated based on 9x the three-year average historical Dole Adjusted EBITDA, less net debt, subject to a cap and a floor price.

Effective as of 31 July 2023, in the event that Total Produce has not exercised its right to acquire the Third Tranche, the C&C shareholders are permitted to cause a process to market and sell Dole Holdings or all or substantially all of its assets.

If completion of the Transaction fails to occur for any reason, Total Produce will continue to be entitled to acquire the Second Tranche and the Third Tranche on the terms set forth above.

Timing and Next Steps

An Extraordinary General Meeting will be convened in due course for Total Produce shareholders to consider and, if thought fit, approve the Resolutions. The Resolutions will be set out in a circular, which is expected to be published in April 2021. Approval from the High Court of Ireland will be sought shortly after receiving the required approvals from Total Produce shareholders.

The Transaction is expected to close in late Q2 or early Q3 2021, subject to the approvals and conditions set out above.

Management and Governance

The highly regarded management teams of Total Produce and Dole, with combined experience of over 150 years in the fresh produce sector, will continue to operate the combined business, and Dole plc will continue to service customers with high quality fresh products as both Total Produce and Dole have done heretofore.

Upon completion of the Transaction, Carl McCann, current Chairman of Total Produce, will assume the role of Chairman of Dole plc. Rory Byrne, current Chief Executive of Total Produce, will become Chief Executive of Dole plc. Johan Lindén, current Chief Executive of Dole, will become Chief Operating Officer of Dole plc. Frank Davis, current Finance Director of Total Produce, will become Chief Financial Officer of Dole plc. Johan Malmqvist, current Chief Financial Officer of Dole, will become Executive-VP Finance of Dole plc. Jared Gale, current General Counsel of Dole, will become Chief Legal Officer of Dole plc. Jacinta Devine, current Company Secretary of Total Produce, will become Company Secretary of Dole plc.

The combined company, operating under the Dole brand, will be incorporated in Ireland, with its Global Headquarters in Dublin, Ireland, and its Headquarters for the Americas in Charlotte, North Carolina.

Contacts

Blake Sonnenshein, Brunswick Group

[email protected]
+1 212 333 3810

Elizabeth Volpe, Brunswick Group

[email protected]
+ 1 212 333 3810

Brian Bell, Wilson Hartnell PR

[email protected]
+ 353-1-669 0030

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