Campbell Soup will send out the financial books for carrot and smoothie company Bolthouse Farms to potential buyers Monday, continuing its retreat from the fresh food industry, people familiar with the situation tell CNBC.
The soup company had previously said it is selling Bolthouse Farms and other fresh food investments, along with its international snack brands, to help pay down debt. The company more than tripled its debt load to help finance its $6.1 billion acquisition of Snyder’s-Lance earlier this year.
Moving into fresh food was part of a strategy heralded by former CEO Denise Morrison. The goal had been to take cash flow from Campbell’s profitable but slowing soup business and invest it into more on-trend areas of the grocery store.
The fresh food industry, though, proved to be a poor fit for Campbell. The industry requires expertise in agriculture that Campbell lacked. It is difficult as a public company to manage a fresh food business, which is subject to the whims of the weather, contrary to the predictability public investors demand. An ill-timed California drought further exacerbated Campbell’s challenges with Bolthouse.
The soup company paid $1.55 billion for Bolthouse Farms in 2012, when the brand had more than $100 million in earnings before interest depreciation and amortization. It is now losing money, CNBC has reported.
Those challenges, though, may be an opportunity for prospective buyers, who can buy it off its peak, with the aim of turning it around. Campbell has signed roughly 30 non-disclosure agreements, the people told CNBC. It has attracted interest both from corporate and private equity buyers, particularly among those with experience managing fresh food.
Jeffrey Dunn, former CEO of the Bolthouse Farms, is among those eyeing the business, the people said. He has talked to private equity funds to help raise money to fund that bid, the people say.
Meantime, Campbell has already begun to sell its Garden Fresh Gourmet business, which it bought for $231 million in 2015, CNBC previously reported. It is looking at selling Garden Fresh and Bolthouse Farms separately to see if it can expedite the sale and fetch a higher total price.
Among those interested in Garden Fresh is Jack Aronson, one of the brand’s co-founders, one of the people said.
Campbell’s sale of its international snacking business, which includes Arnott’s cookie and crackers, is further along. Campbell has signed several non-disclosure agreements for that cookie business, the people said.
The people requested anonymity because the negotiations are confidential.
“Bolthouse Farms and Garden Fresh Gourmet are attractive businesses with strong brands, and we’re pleased with the high level of interest in each from both strategic and financial buyers. We’re focused on completing these transactions in a timely and disciplined manner that maximizes value,” Thomas Hushen, a spokesperson for Campbell said.
CNBC reached out to Dunn and Aronson via LinkedIn and didn’t immediately receive a response.