Paris-based Danone, which owns brands including Actimel, Oikos and Evian, is offering $56.25 per share in an all-cash deal, representing a total enterprise value of c$12.5bn (including debt and other WhiteWave liabilities), said Danone, which is paying around 26 times 2016 estimated EBITDA for WhiteWave – well above an average multiple of around 15 times in recent dairy deals, according to an analysis by Bloomberg.
Denver-based WhiteWave – which generated net profit of $168m on revenue of $3.9bn in 2015 from brands including Silk, So Delicious, Vega, Alpro, Provamel, Horizon Organic, Wallaby Organic, Earthbound Farm and International Delight – became a public company in 2012, and has since grown sales at a 19% compound annual growth rate through 2015, both from acquisitions and strong organic growth in areas such as almond milk.
Following the deal, which is expected to close by the year-end, WhiteWave chairman and CEO Gregg Engles will join Danone’s board, added Danone, which said WhiteWave had a strong position in high growth categories:
“Organic foods and beverages and non-GMO plant-based alternatives to milk and yogurt are among the fastest growing categories in the industry. WhiteWave has been the fastest growing food and beverage company in the United States and one of the fastest growing in Europe for the past four years.
“In joining Danone, WhiteWave will have the opportunity to continue its industry-leading growth as part of a larger global company with substantial financial, geographic and operational resources."
No conflict between dairy and plant-based alternatives
Julian Mellentin, director and founder of consultancy New Nutrition Business, told our sister site DairyReporter that the deal "comes as no surprise," adding that "forward-thinking" dairy companies did not see any conflict of interest when building a presence in plant-based dairy alternatives, while he also predicted that Danone would likely "let WhiteWave continue to operate as a separate entity and keep its own culture."
Danone did not explain in detail where the estimated $300m of synergies by 2020 would come from, or what the deal would mean for US jobs or the WhiteWave HQ in Denver (Danone's US subsidiary Dannon is based in White Plains, New York), but said savings would come from combining resources in R&D, marketing and distribution.
"By building on its resources, scale, distinctive R&D and marketing capabilities, and route to market expertise especially in the chilled category, Danone will have significant opportunities to support WhiteWave’s continued growth while also realizing significant sales growth and cost synergies."
Following the closing of the transaction, Danone and WhiteWave expect to combine their US activities into a public benefit corporation.