Campbell in talks to sell fresh unit to investors led by Dunn
Former Bolthouse CEO helped sell juice maker to Campbell for $1.55 billion in 2012
Campbell Soup Co. is in talks to sell its fresh-foods business including Bolthouse Farms to investors led by that brand’s former chief executive, according to people familiar with those discussions.
Jeff Dunn, who helped a private-equity firm sell Bolthouse to Campbell six years ago for $1.55 billion, subsequently co-founded and remains an investor in Campbell’s venture-capital fund, Acre Venture Partners. He also had served as president of Campbell’s fresh-food unit.
The fresh-foods unit, including Bolthouse’s fresh carrots and refrigerated juices as well as Garden Fresh salsa and other products, has been plagued by supply-chain issues. Campbell has written down its value by about $1 billion. It could sell for between $500 million and $700 million, according to other people familiar with the business.
Others, including strategic buyers and private-equity firms, also have expressed interest in the business, but discussions with Mr. Dunn’s group are further along, the people said. Mr. Dunn, a former Coca-Cola Co. executive, is working with private-equity investors, the people said.
Bolthouse’s sales and operating profit plunged in recent years, and Campbell in August said it intended to sell the freshfoods unit following a strategic review. The soup giant is also looking to sell its international business, including the Arnott’s and Kelsen biscuit brands, which is expected to garner wide interest, according to people familiar with the process.
Divesting the international and fresh businesses, which were expected to generate a fifth of Campbell’s revenue in its current fiscal year, would allow the company to focus on a core soup business that has been in decline for years. The Wall Street Journal has reported that board members believe a leaner Campbell could be more attractive to potential buyers of the whole remaining company. The company said in a letter to shareholders Thursday that paying down debt and expanding its snacks business are also key to its strategy.
Campbell is also facing a proxy fight with activist investor Third Point LLC, which previously called for a sale of the whole company and is now seeking to replace its entire 12-person board. The vote will take place at Campbell’s annual shareholder meeting Nov. 29.
Third Point, which is working with a Campbell heir, said in a presentation to shareholders this week that the company’s strategic review was flawed, recommending divestitures that “largely preserved the status quo.”
The hedge fund, run by investor Daniel Loeb, also said the board “completely botched” its pivot into fresh foods and that its directors would quickly stabilize the unit by cutting costs.
Campbell’s fate depends largely on the decision of descendants of the founder of its condensed soup. The heirs own at least 45% of the company’s stock.
When Campbell agreed to buy Bolthouse Farms from privateequity firm Madison Dearborn Partners LLC in 2012, Denise Morrison, Campbell’s new CEO at the time, said she would run it as a separate business to avoid distracting Campbell from fixing its main brands in its North America business.
Campbell bought Garden
Fresh in 2015 for $231 million.
Ms. Morrison didn’t solve the problems with stagnant soup sales, and weak carrot harvests and juice recalls hurt Bolthouse’s sales and its relationships with retailers. Campbell struggled to master a fresh-food supply chain that differed drastically from its long-lasting canned soups and cookies business.
Ms. Morrison resigned in May. The company is still looking for a permanent successor.