Honolulu Star-Advertiser

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Business

Dole Food seeks return to stock markets, again

SAN FRANCISCO >> It was a little more than three years ago that billionaire David Murdock took Dole Food Co., the business synonymous with Hawaii pineapples, private for the second time.

Now Dole is looking to return to the public stock market.

With Dole’s filing on Tuesday for an initial public offering, Murdock — who is 94 and has a net worth that Forbes estimates at $2.7 billion — will have the chance to cash in on his latest takeover of the company.

It is not clear how much he will collect from the stock sale because the prospectus does not specify how much the company is seeking to raise. One figure listed in the filing, $100 million, is a preliminary number to be used as a basis for calculating registration fees.

Also unclear is investors’ interest in Dole. The company said it lost nearly $23 million last year, more than double what it lost in 2015. Excluding a host of costs like stock-based compensation and litigation charges — a calculation the company calls adjusted EBITDA, for earnings before interest, taxes, depreciation and amortization —the business reported $215.6 million in profit.

Its sales shrank slightly, to $4.5 billion in 2016 from $4.6 billion in 2015. Dole attributed some of that drop to the shutdown of a factory for packaged salads in Springfield, Ohio, for four months last year because of what was suspected of being a link to a listeria outbreak.

The Dole of today is the work of Murdock, a high school dropout and, briefly, a homeless Army veteran who got his start in business by buying and selling a diner. He then turned his eye to affordable housing developments in the Southwest.

But it was his purchase in 1985 of Castle & Cooke, the nearly bankrupt remainder of a Hawaii agricultural giant, that propelled him to success. Castle & Cooke gave him access not only to land, which he developed profitably, but also to Dole, which introduced the United States to Hawaii pineapples and ran the state’s biggest sugar cane fields.

(Dole was established in Hawaii by James Dole in 1901 as Hawaiian Pineapple Co., and the firm expanded to operate what became the largest pineapple plantation in the world for a time. Today, Dole owns 19,500 acres on Oahu, of which 4,100 acres are farmed in pineapple, 200 acres are planted in coffee and cacao, and 14,800 “idle” acres with a book value of $117 million are marketed for sale. Dole also has a deal to acquire the Dole Plantation visitor attraction in Wahiawa from Castle & Cooke.)

Murdock’s eye for real estate turned Castle & Cooke into a successful developer while his management of Dole made the business one of the world’s biggest sellers of fruits and vegetables. It also allowed Murdock to sell Lanai, which he gained when he bought Castle & Cooke, to Oracle mogul Larry Ellison for hundreds of millions of dollars in 2012.

Although Dole separated from Castle & Cooke in 1996, Murdock bought it back in 2003 for $2.3 billion. Dole went public again in 2009, with the markets valuing it at $1.1 billion. Murdock continued to reshape Dole, selling its packaged goods and Asian produce operations to Itochu of Japan for $1.7 billion in 2012.

Murdock moved again to buy full control of Dole in 2013, valuing the company at $1.6 billion and offering other shareholders $13.50 a share. That transaction was marred by controversy, however, after a Delaware judge found that Murdock and a top lieutenant had unfairly driven down Dole’s price to buy the company more cheaply.

The judge ultimately ordered Murdock and the other executive to reimburse other shareholders $148 million, one of the biggest awards in a merger-­related lawsuit.

Nevertheless, throughout Tuesday’s filing, Dole paid tribute to its longtime owner.

“Our inspiration and vision comes from Mr. Murdock, who has been at the forefront of Dole and the fresh produce industry for over 30 years,” the company said. “Collectively, the senior management team has successfully delivered strong operating and financial results through disciplined execution and implementation of Mr. Murdock’s vision.”


Star-Advertiser reporter Andrew Gomes contributed to this story.


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