Dole plc CEO Rory Byrne has had an eventful week.
On Thursday, the mega-merger of global produce giants Dole Foods and Total Produce officially completed, creating the world's largest produce company. And Friday morning, the newly minted Dole plc had its initial public offering on the New York Stock Exchange. Trading of stock code DOLE began at $16 a share, and raised the company $400 million.
In an interview with Food Dive as trading was starting on Friday morning, Byrne said he's delighted with the week's events.
"We've got a very diversified, solid and steady earnings base and we can grow in the future," he said. "We're in a healthy space. We're very focused on the whole area of ESG, environmentally friendly production, running the business in an environmentally friendly way. We've got the right balance sheet, with the $400 million raise. ... We've got a very strong management team. We worked very well together. We're very excited about the future."
The brand new Dole plc is a powerhouse, with sales worth more than $8.97 billion last year, according to the registration form it filed with the U.S. Securities and Exchange Commission earlier this month in preparation for its IPO. The company projects a compound annual growth rate of 2.7% in its two primary markets of the U.S. and Europe between 2020 and 2025 as more consumers reach for fresh and organic produce. Dole is one of the world's largest producers of bananas, which make up 27% of the combined company's total products. Other fruit including pineapples comprise 45% of its product mix, while fresh vegetables — including salad mixes — make up the remaining 28%.
As recently as last week, Dole plc had targeted a sale of 26 million shares at a price between $20 and $23 each. The company ended up making its IPO with 25 million shares at a price of $16 each. Byrne said the main reason for the change was the large number of other companies making their IPO this month. There may be a bit of portfolio manager saturation, he said, and the company looked at its balance sheet to see what kind of capital raise they needed, and how they could be well positioned for the future.
Its first morning of trading was not promising, with share prices quickly dropping 5%.
Dole plc has many big plans for the future, Byrne said, which have a lot to do with integrating U.S.-based Dole and Ireland-based Total Produce. Under the reorganization plan, Byrne, who was the CEO of Total Produce, is helming the new company, while former Dole CEO Johan Lindén is the new COO. The company's global headquarters is in Dublin, and its Americas HQ is in Charlotte, North Carolina. While Dole has a massive business in the Americas and Total Produce is entrenched in Europe, the combined company has a more global reach.
The combined company's sheer size and ownership of much of its supply chain adds to its capabilities. According to the F-1 filing, Dole offers more than 300 products from more than 30 countries, which are sold in 80 countries worldwide. It owns more than 109,000 acres of farm land, with its own well-sourced supply chain — 16 refrigerated shipping vessels, 12 cold storage facilities, 75 packing houses and 162 distribution and manufacturing facilities. The company has about 40,000 employees across 29 countries. Byrne said the newly combined company will work to streamline all of these systems and create new efficiencies.
While the newly combined Dole is massive, the company sees significant areas for growth. In its registration file, the company outlined plans to grow its berry and avocado businesses, currently worth about $700 million in pro forma sales, both through new varieties and utilizing scale to shorten the path from grower to market. Byrne said he wants to improve organic fresh produce offerings and work to strengthen and streamline the value-added salads the company produces in both the U.S. and Europe in terms of packaging, meal kits and other innovative growth opportunities.
Byrne said Dole plc is the kind of company that can take full advantage of wellness trends that have taken hold during the pandemic, and it has been able to come through the pandemic with strong future earnings potential. While there are not many other produce companies publicly traded in the U.S., Byrne said that Dole plc belongs where it is — especially with an iconic brand name that many consumers automatically associate with bananas, pineapples and salads.
"As a result of this IPO, we're really well positioned with our management team to take full advantage of the opportunity the industry presents," he said.