We're All on the Dole Now!

Dole Food Files IPO, Will Be Public Again

The company says broader underlying demand for its products is consistent and increase, as consumer and supermarkets alike focus on more fresh produce.

But the current economic downturn has affected the company: net revenue declined 11% to $3.3 billion in the six months ended June 20, and net income fell 18% to $123 million compared with the same period a year ago.

Behold the "broader underlying demand"! Gasp at how "consistent" the net revenue is increasing! Step right up folks. Every investor can be a winner!

On a financial level, the company is loaded with debt -- about $2.06 billion -- and warns that it may not be able to generate sufficient cash flow to service its loans.

That's where I come in. I'm writing a check right now for $7. Pay to the order of "Goldman Sachs Group Inc., Bank of America Corp.'s Bank of America Merrill Lynch unit, Deutsche Bank AG and Wells Fargo & Co.'s Wells Fargo Securities". That's who is managing the IPO. With so many banking cooks in the kitchen, the investment is sure to be a smashing success!

Why $7? That's what each and every American (all 304 million of us) would need to pay in order to completely clean the balance sheet of this company "loaded with debt" (all $2,060,000,000 of it). Heck, we'd even have $68 million left over to throw the executives one heck of a toga party!

July 15, 2007
Debt Levels

In order for young companies to grow, they must have ample capital on hand to expand the business and take care of daily operations. For most companies, this means resort to the debt markets as a means of getting the necessary capital. There is nothing wrong with this, and it is a trademark of our vibrant economy that such a market exists. However, too much debt can crush a company.

Something went wrong with our vibrant economy's debt markets. Oops! Further, is it just me or is Dole not really a young company? It is just now going public again though. I guess that's something.

Dole Food Company

The company traces its origin to the 1851 establishment of Castle & Cooke by missionaries Samuel Northrup Castle and Amos Starr Cooke. Castle & Cooke rapidly became one of the largest companies in Hawaii, investing in shipping, railroad construction, sugar production, and seafood packing. The other half of Dole's corporate heritage, The Hawaiian Pineapple Company, was founded in 1901 by James Dole, who opened his first pineapple plantation in the central plateau of the Hawaiian island of Oahu.

I missed my chance to invest 100 years ago. Now I'll be getting another chance. Woohoo! *sarcasm*

Fitch has positive take on Dole IPO

The company plans to use the offering's proceeds to pay off some debt, with any remaining funds used for general corporate purposes.

Time machine time.

December 19, 2002
Chairman takes Dole private in $2.4B deal

The transaction continues a recent trend of companies being taken private by their executives as stock valuations have fallen. Typically, the executives look to fix the company's balance sheet outside of the market's glare and return to the public markets once valuations improve.

Two thoughts...

1. If executives like to take companies private when stock valuations have fallen, then using that logic in reverse what would make executives want to take companies public? Fat and juicy stock valuations? You never see that in the news though. Go figure.

2. Apparently that whole "fix the company's balance sheet outside of the market's glare" idea was completely bogus! Color me surprised! Sort of, well, er, not really I guess.