(Update with analyst comment) Shares of Camden-based Campbell Soup Co. slipped as much as 1% in early trading after the Camden-based canned-soup maker said it would pay $1.55 billion for Bolthouse Farms, a California-based carrot grower and juice and salad distributor, to its owner, buyout firm Madison Dearborn Partners.
Bolthouse and its organic-juice lines are growing faster than Campbell and its soups and V-8 juice, but Campbell's profit margin of around 15% (higher for soup) is going to be weighed down by Bolthouse's 13% margin, analyst Jonathan Feeney told clients at Janney Capital Markets in a report today.
During its past fiscal year Bolthouse said it grossed profits of $92 milllion -- before paying interest and taxes - on sales of $689 million.
Campbell CEO Denise Morrison said she would run Bolthouse as a stand-alone company under current Bolthouse boss Jeff Dunn. Like her predecessors, Morrison has been trying to boost Campbell profits in the face of weak canned-soup sales. It's a good time to borrow money (rates are low), but Bolthouse's fresh-carrots business (half of total sales) is weather-sensitive and thus more volatile than prepared-foods sales, Feeney added.