Home Doll market Dole: debt and competition make the offer less tasty

Dole: debt and competition make the offer less tasty

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At first glance, the IPO offered by Dole should be as simple as one of the fruit salads. Fresh from the merger of companies Fully produced in Ireland at the start of the year, it is one of the leading producers of fruit and vegetables in the world. Growth is progressing steadily, but not explosively, thanks to the transition to a healthier diet. Unlike many new publishers these days, it’s beneficial.

Still, the plan to sell stocks at a valuation of $ 2.1 billion might not suit everyone’s tastes. Fierce competition, slim margins, and high leverage can reduce the appetite for a product.

After the IPO, Dole claims to have net debt of $ 1.1 billion, about three times that of last year’s adjusted EBITDA. Irish fruit distributor Fyffes traded multiples less than twice during its preparatory phase. Acquisition 2016 According to data from Capital IQ, it is a subsidiary of the Japanese conglomerate Sumitomo.

Interest expense was $ 72 million, roughly the same bottom line as last year’s doll.

Still, the company is trying to increase investor enthusiasm by looking at growth prospects. According to GlobalData, the fresh fruit and vegetable market is worth $ 335 billion in 2019 in North America and Europe. At Dole, last year’s revenue grew nearly 4% on a pro forma basis to $ 9 billion.

While the dolls are mainly sourced from fresh fruits such as bananas and pineapples, the company also sells ready-made products such as vegetables, packaged salads, juices and fruit cups, which are profitable. . According to the company, it plans to expand its presence in berries and avocados, where demand is growing the fastest.

However, farming is a business that is influenced by many external factors. Changes in immigration, crop diseases or bad weather can jeopardize the best growth forecasts. At the same time, large indoor farming companies such as App Harvest and Aero Farms have successfully acquired investor capital and established themselves in the listed market. Future investors will have no shortage of companies to choose from.

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