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Filed pursuant to Rule 424(b)(4)
Registration No. 333-257621

 

Prospectus

 

25,000,000 Ordinary Shares

LOGO

Dole plc

Ordinary Shares

 

 

This is an initial public offering of ordinary shares of Dole plc. We are offering 25,000,000 ordinary shares. Our shares have been approved for listing on the New York Stock Exchange under the symbol “DOLE.”

This offering is being made in connection with, and is conditioned upon, the completion of the Transaction (as defined below) between Total Produce plc (“Total Produce”) and the parent company of Dole Food Company, Inc. (“Dole Food Company”) to form Dole plc, as further described in this prospectus.

We intend to use the net proceeds from this offering to pay certain costs of the Transaction (as defined below) and, together with cash on hand and borrowings under our revolving credit facility, to repay certain of our and our subsidiaries’ outstanding indebtedness.

 

 

We have granted the underwriters an option for a period of 30 days after the date of this prospectus to purchase up to an additional 3,750,000 ordinary shares at the initial public offering price less the underwriting discounts and commissions.

Upon the completion of this offering, (i) investors purchasing ordinary shares in this offering will beneficially own approximately 26.9% of our ordinary shares (or approximately 29.7% if the underwriters exercise their option to purchase additional ordinary shares in full); (ii) shareholders of Total Produce immediately prior to completion of the Transaction (the “TP Holders”) will beneficially own approximately 60.3% of our ordinary shares (or approximately 58.0% if the underwriters exercise their option to purchase additional ordinary shares in full); and (iii) Castle & Cooke Holdings, Inc. and The Murdock Group, LLC who were indirect shareholders of Dole Food Company immediately prior to the completion of the Transaction, will beneficially own approximately 12.8% of our ordinary shares (or approximately 12.3% if the underwriters exercise their option to purchase additional ordinary shares in  full).

Investing in our ordinary shares involves risks. See “Risk Factors” beginning on page 31 to read about certain factors you should consider before buying our ordinary shares.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

     Per Share      Total  

Initial public offering price

   $ 16.00      $ 400,000,000  

Underwriting discounts and commissions(1)

   $ 0.88      $ 22,000,000  

Proceeds, before expenses, to us

   $ 15.12      $ 378,000,000  

 

(1)

See “Underwriting (Conflict of Interest)” for a description of the compensation payable to the underwriters.

 

    

The underwriters expect to deliver the ordinary shares against payment on or about August 3, 2021.

 

 

Goldman Sachs & Co. LLC   Deutsche Bank Securities   Davy
BofA Securities   BMO Capital Markets  

Rabo Securities

 

Stephens Inc.

 

 

Prospectus dated July 29, 2021


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LOGO

Dole


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LOGO


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LOGO

Dole OUR MISSION make the world a healthier place


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LOGO


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LOGO

Dole At a glance


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LOGO

#1
FRESH PRODUCE COMPANY BY SIZE
#1
BRAND IN THE INDUSTRY1


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PROSPECTUS SUMMARY

     1  

THE OFFERING

     22  

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     25  

RISK FACTORS

     31  

DESCRIPTION OF THE TRANSACTION

     63  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     73  

INDUSTRY, MARKET, AND OTHER DATA

     75  

USE OF PROCEEDS

     77  

DIVIDEND POLICY

     78  

CAPITALIZATION

     79  

DILUTION

     80  

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

     81  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TOTAL PRODUCE AND DOLE

     96  

BUSINESS

     150  

MANAGEMENT

     177  

EXECUTIVE COMPENSATION

     184  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     204  

PRINCIPAL SHAREHOLDERS

     207  

DESCRIPTION OF CERTAIN INDEBTEDNESS

     209  

DESCRIPTION OF SHARE CAPITAL

     211  

SHARES ELIGIBLE FOR FUTURE SALE

     230  

ANTICIPATED MATERIAL IRISH TAX CONSEQUENCES TO NON-IRISH HOLDERS OF OUR SECURITIES

     232  

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

     237  

UNDERWRITING (CONFLICT OF INTEREST)

     240  

EXPENSES RELATED TO THE OFFERING

     247  

LEGAL MATTERS

     248  

EXPERTS

     248  

ENFORCEMENT OF CIVIL LIABILITIES

     251  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     252  

Through and including August 23, 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

You should rely only on the information contained in this prospectus, any amendment or supplement to this prospectus and any free writing prospectus prepared by us or on our behalf to which we have referred you. Neither we nor the underwriters have authorized anyone to provide you with different or additional information or to make any representations other than those contained in this prospectus, in any amendment or supplement to this prospectus or in any free writing prospectus we have authorized for use with respect to this offering. Neither we nor the underwriters take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you or any representation that others may make to you. We are not making an offer of these securities in any state, country or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, in any amendment or supplement to this prospectus or in any free writing prospectus is accurate as of any date other than the date of such document (or any earlier date as of which such information is given) regardless of its time of delivery or the time of any

 

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sales of our ordinary shares. Our business, financial condition, results of operations, cash flows, assets, liabilities or prospects may have changed since that date.

We are incorporated under the laws of Ireland and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission (the “SEC”), we are currently eligible for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Exchange Act. See “Implications of Being a Foreign Private Issuer.”

For investors outside the United States: Neither the Company nor any of the underwriters has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ordinary shares and the distribution of this prospectus outside the United States.

 

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ABOUT THIS PROSPECTUS

Basis of Presentation

As used throughout this prospectus, the following terms have the meanings, unless the context otherwise requires:

 

   

the “Company,” “we,” “us,” and “our” refer (i) after giving effect to the Transaction, to Dole plc and its consolidated subsidiaries, which will include Total Produce and Dole Food Company, (ii) for periods from and after July 30, 2018, when Total Produce acquired a 45% equity interest in DFC Holdings, and up to the completion of the Transaction, to Total Produce, its consolidated subsidiaries and Dole Food Company, which operated as a part of an operating segment of Total Produce, and (iii) for periods prior to July 30, 2018, to Total Produce and its consolidated subsidiaries;

 

   

“C&C Holdings” refers to Castle & Cooke Holdings, Inc.;

 

   

“C&C Parties” refers to, collectively, TMG, C&C Holdings and, prior to the completion of the Transaction, Dolicious;

 

   

“DFC Holdings” refers to DFC Holdings, LLC, the parent company of Dole Food Company;

 

   

“Dole Food Company” refers to Dole Food Company, Inc. on a consolidated basis;

 

   

“Dole plc” refers to Dole plc on a consolidated basis following the consummation of the Transaction;

 

   

“Dolicious” refers to Dolicious Corporation;

 

   

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

   

“Fresh Packed Vegetables” refers to various commodity vegetables including mainly iceberg lettuce, romaine hearts, green onions, radishes, brussels sprouts, artichokes, asparagus, celery, broccoli and cauliflower, in each case produced conventionally or organically as defined by the Dole plc management team;

 

   

“Merger Sub” refers to TP-Dole Merger Sub, LLC;

 

   

“NYSE” refers to the New York Stock Exchange;

 

   

“Securities Act” refers to the Securities Act of 1933, as amended;

 

   

“TMG” refers to The Murdock Group, LLC;

 

   

“Total Produce” or the “Group” refers to Total Produce plc on a consolidated basis;

 

   

“TP Holders” refers to the shareholders of Total Produce immediately prior to completion of the Transaction;

 

   

“Total Produce Parties” refers to Dole plc (formerly known as Pearmill Limited), Total Produce, TP USA and Merger Sub;

 

   

“TP USA” refers to Total Produce USA Holdings Inc.;

 

   

the “Transaction” refers to, collectively, the Share Exchange, the Merger (each as defined below) and the other transactions described below in the sections entitled “Description of the Transaction—Merger and Related Transactions—Pre-Closing Unit Sales” and “Description of the Transaction—Merger and Related Transactions—Contribution” (excluding, for purposes of clarity and the avoidance of doubt, this offering);

 

   

“Transaction Agreement” refers to the binding transaction agreement, dated February 16, 2021 (as amended on April 23, 2021 and from time to time thereafter), by and among the Total Produce Parties, DFC Holdings and the C&C Parties, which currently own a 55% interest in DFC Holdings, pursuant to which Total Produce agreed to combine with DFC Holdings under Dole plc and, upon the terms and subject to the conditions set forth in the Transaction Agreement, complete this offering as soon as possible thereafter;

 

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“U.S. GAAP” refers to U.S. Generally Accepted Accounting Principles; and

 

   

“Value Added Salads” refers to all ready to eat kits, salad kits and salad mixes as per Nielsen.

Basis of Presentation

Total Produce’s fiscal year ends on December 31. Dole Food Company changed its fiscal year end from a 52/53 week year ending on the Saturday closest to December 31 to a calendar year ending on December 31, effective with fiscal year 2020. Unless otherwise noted, any reference to a year in the context of Total Produce’s financial data preceded by the word “fiscal” refers to the fiscal year ended December 31 of that year. Any reference to a year in the context of Dole Food Company’s financial data preceded by the word “fiscal” for fiscal years prior to fiscal year 2020 refers to the fiscal year ended on the Saturday closest to December 31 of that year. For example, references to “fiscal year 2020” refer to the fiscal year ended December 31, 2020 for each of Total Produce and Dole Food Company and references to “fiscal year 2019” refer to the fiscal year ended December 31, 2019 with respect to Total Produce and to the year ended December 28, 2019 with respect to Dole Food Company. Any reference to a year not preceded by “fiscal” refers to a calendar year. Certain amounts, percentages and other figures presented in this prospectus have been subject to rounding adjustments and therefore may not represent the arithmetic summation or calculation of the figures that precede them.

The financial results of Total Produce, Dole Food Company and their respective subsidiaries will be consolidated in the financial statements of Dole plc following the Transaction and this offering. Dole plc has engaged to date only in activities in contemplation of the Transaction and this offering and will have no operations or assets prior to the completion of the Transaction. Following the completion of this offering, Dole plc will be a holding company, and its principal asset will be ordinary shares of Total Produce, all of which it will hold directly or indirectly through holding companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company” for more information.

References in this prospectus to pro forma figures give effect to (i) the Transaction, (ii) the sale by us of ordinary shares in this offering at the initial public offering price of $16.00 per share, (iii) this offering and the use of proceeds hereby, and (iv) the consummation of debt financing in connection with the Transaction, as if they had occurred on January 1, 2020. See “Unaudited Pro Forma Condensed Consolidated Financial Information” for more information.

Our financial statements, the financial statements of Total Produce and the financial statements of DFC Holdings included in this prospectus were prepared in accordance with U.S. GAAP.

Certain of our financial information is presented in euros. For the convenience of the reader, in this prospectus, unless otherwise indicated, translations from euros into U.S. dollars were made at the rate of 1.00 to $1.2107 for income statement information and $1.1728 for balance sheet information, which were the average closing rates per OANDA.com for the quarter ended March 31, 2021 and the closing rate on March 31, 2021, respectively. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of euros at the dates indicated or any other date.

All references in this prospectus to “$” mean U.S. dollars and all references to “” mean euros.

 

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Market and Industry Data

Certain market and industry data included in this prospectus has been obtained from third-party sources that we believe to be reliable, including data that we have commissioned. Market estimates are calculated by using independent industry publications, government publications, and third party forecasts in conjunction with our assumptions about our markets. We have not independently verified such third party information. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors” in this prospectus. For more information on the market and industry data we use, see “Industry, Market and Other Data.”

Trademarks, Service Marks and Trade Names

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. We use the DOLE registered mark, trademark and related design marks in this prospectus. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ®, TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.

Implications of Being a Foreign Private Issuer

Our status as a foreign private issuer exempts us from compliance with certain laws and regulations of the SEC and certain regulations of the NYSE. As of the completion of this offering, we intend to follow the NYSE corporate governance standards for domestic issuers. However, we may in the future elect to follow home country practice in Ireland. Consequently, as a foreign private issuer, we are not subject to all of the disclosure requirements applicable to U.S. public companies. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our executive officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning us than there is for U.S. public companies.

In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information.

We may take advantage of these exemptions until such time as we no longer qualify as a foreign private issuer. In order to maintain our current status as a foreign private issuer, either a majority of our outstanding voting securities must be directly or indirectly held of record by non-residents of the United States, or, if a majority of our outstanding voting securities are directly or indirectly held of record by

 

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residents of the United States, a majority of our executive officers or directors may not be United States citizens or residents, more than 50% of our assets cannot be located in the United States and our business must be administered principally outside the United States.

We have taken advantage of certain of these reduced reporting and other requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold equity securities.

Non-GAAP Financial Measures

Total Produce Non-GAAP Financial Measures

In addition to its results under U.S. GAAP in this prospectus we also present Total Produce’s EBIT and Adjusted EBITDA which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP.

EBIT is calculated from net income by adding net interest expense and tax expense.

Adjusted EBITDA is calculated from EBIT by: (1) adding depreciation charges; (2) adding intangible asset amortization charges; (3) adding litigation and transaction related costs; (4) adding or subtracting fair value movements on contingent consideration; (5) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (6) adding net unrealized loss or subtracting the net unrealized gain on derivative instruments; (7) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (8) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (9) adding restructuring charges or onerous contract costs; (10) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (11) adding financing charges and other debt related costs; (12) deducting the gain or adding the loss on the sale of equity investments or other business interests and (13) adding the foreign currency gains relating to proceeds from share placings. It also includes the Group share of these items within equity method investments and the following items specific to its equity method investment in Dole Food Company; (A) deducting costs of discontinued operations; (B) adding vegetable recalls and related costs and (C) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations.

Management uses EBIT and Adjusted EBITDA because they are measures commonly used by financial analysts in evaluating the performance of companies in our industry. The adjustments in calculating Adjusted EBITDA have been made because management excludes these amounts when evaluating performance because it eliminates the effects of (i) considerable amounts of non-cash depreciation and amortization and (ii) items not within the control of the Company’s operations managers. EBIT or Adjusted EBITDA is not calculated or presented in accordance with U.S. GAAP, and is not a substitute for net income, income from continuing operations, cash flows from operating activities or any other measure prescribed by U.S. GAAP. Further, EBIT or Adjusted EBITDA as used herein is not necessarily comparable to similarly titled measures of other companies.

A reconciliation of these non-GAAP measures to revenue and net income, the most directly comparable measure calculated in accordance with U.S. GAAP, are set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

 

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Dole Food Company Non-GAAP Financial Measures

In addition to its results under U.S. GAAP presented in this prospectus, Dole Food Company’s EBIT before discontinued operations and Adjusted EBITDA, which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP, are also presented in this prospectus.

EBIT before discontinued operations is calculated from net income (loss) by adding the loss from discontinued operations, net of income taxes, adding interest expense from continuing operations, and adding the income tax expense from continuing operations. Adjusted EBITDA is calculated from EBIT before discontinued operations by: (1) adding depreciation and amortization; (2) adding the net unrealized loss or subtracting the net unrealized gain on derivative instruments; (3) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (4) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (5) adding restructuring charges; (6) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (7) adding vegetable recalls and related costs; (8) adding refinancing charges and other debt related costs; (9) adding litigation and transaction costs; (10) adding asset write-downs; and (11) adding costs that are directly related to the COVID-19 pandemic, and are as follows: costs that are (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Dole Food Company did not add-back any costs related to COVID-19 after the third quarter of 2020.

However, EBIT before discontinued operations and Adjusted EBITDA are not measurements of Dole Food Company’s financial performance under U.S. GAAP and should not be considered as alternatives to net income (loss) attributable to Dole Food Company, net income (loss), income (loss) from continuing operations or any other performance measures derived in accordance with U.S. GAAP. Additionally, EBIT before discontinued operations and Adjusted EBITDA are not intended to be liquidity measures because of certain limitations such as:

 

   

they do not reflect Dole Food Company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

   

they do not reflect changes in, or cash requirements for, Dole Food Company’s working capital needs;

 

   

they do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on Dole Food Company’s debt; and

 

   

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-GAAP measures do not reflect cash requirements for such replacements.

Because of these limitations, EBIT before discontinued operations and Adjusted EBITDA should not be considered as measures of discretionary cash available to Dole Food Company to invest in the growth of its and Dole plc’s business.

Further, EBIT before discontinued operations and Adjusted EBITDA as used herein may not be calculated in a similar manner to, and are therefore not necessarily comparable with, similarly titled measures of other companies. However, we have included EBIT before discontinued operations and Adjusted EBITDA herein because Dole Food Company’s management believes that EBIT before discontinued operations and Adjusted EBITDA are useful performance measures for it. These non-

 

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GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our operating results or cash flows as reported under U.S. GAAP.

In calculating these non-GAAP financial measures, Dole Food Company makes certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating Dole Food Company’s non-GAAP financial measures, you should be aware that Dole Food Company may, in the future, incur expenses that are the same as or similar to those eliminated or adjusted for in this presentation. Our presentation of these non-GAAP financial measures should not be construed as an inference that Dole Food Company’s future results will be unaffected by any such adjustments. The non-GAAP information in this prospectus should be read in conjunction with Dole Food Company’s audited consolidated financial statements and the related notes included elsewhere in this prospectus. A reconciliation of these non-GAAP measures to net income (loss), the most directly comparable measure calculated in accordance with U.S. GAAP, is set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

Pro Forma Non-GAAP Financial Measures

In addition to its results under U.S. GAAP, in this prospectus we also present Dole plc’s pro forma EBIT, pro forma Adjusted EBITDA, pro forma Adjusted net income attributable to Dole plc and pro forma Adjusted Earnings per Share, which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP.

Pro forma EBIT before discontinued operations is calculated from net income by adding the loss from discontinued operations, net of income tax, adding interest expense and adding the income tax expense from continuing operations.

Pro forma Adjusted EBITDA is calculated from net income by: (1) adding the loss from discontinued operations, net of income tax; (2) adding interest expense; (3) adding the income tax expense from continuing operations; (4) adding depreciation charges; (5) adding intangible asset amortization charges; (6) adding litigation and transaction related costs; (7) adding or subtracting fair value movements on contingent consideration; (8) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (9) adding net unrealized loss or subtracting the net unrealized gain on derivative instruments; (10) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (11) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (12) adding restructuring charges or onerous contract costs; (13) adding the loss or subtracting the gain on asset sales for assets held-for- sale and actively marketed property; (14) adding financing charges and other debt related costs; (15) deducting the gain or adding the loss on the sale of equity investments or other business interests; and (16) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Costs related to COVID-19 are not added back after the third quarter of 2020. The calculation of Pro forma Adjusted EBITDA also excludes the effect of the Group share of these items within equity method investments.

Pro forma Adjusted net income attributable to Dole plc is calculated from net income attributable to Dole plc by: (1) adding the loss from discontinued operations, net of income tax; (2) adding intangible asset amortization charges; (3) adding litigation and transaction related costs; (4) adding or subtracting fair value movements on contingent consideration; (5) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (6) adding

 

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net unrealized loss or subtracting the net unrealized gain on derivative instruments including interest rate swaps; (7) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (8) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (9) adding restructuring charges or onerous contract costs; (10) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (11) deducting the gain or adding the loss on the sale of equity investments or other business interests; (12) adding the fees for bond redemption and charges for extinguishment of existing debt issuance costs; (13) adding back the expense or subtracting the benefit of U.S. Tax Reform discrete income tax expense (benefit); and (14) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Costs related to COVID-19 are not added back after the third quarter of 2020. It also excludes the tax effect and the effect attributable to non-controlling interests share of such items. The calculation of Pro forma Adjusted net income also excludes the effect of the Group share of these items within equity method investments.

Pro forma Adjusted Earnings per Share is calculated from Adjusted net income attributable to Dole plc divided by diluted weighted average number of shares in the applicable period.

However, pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc are not measurements of Dole plc financial performance under U.S. GAAP and should not be considered as alternatives to net income attributable to Dole plc, net income, income (loss) from continuing operations or any other performance measures derived in accordance with U.S. GAAP. Additionally, pro forma EBIT before discontinued operations and pro forma Adjusted EBITDA are not intended to be liquidity measures because of certain limitations such as:

 

   

they do not reflect Dole plc’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

   

they do not reflect changes in, or cash requirements for, Dole plc’s working capital needs;

 

   

they do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on Dole plc’s debt; and

 

   

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-GAAP measures do not reflect cash requirements for such replacements.

Because of these limitations, pro forma EBIT before discontinued operations and pro forma Adjusted EBITDA should not be considered as measures of discretionary cash available to Dole plc to invest in the growth of its and Dole plc’s business.

Further, pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc as used herein may not be calculated in a similar manner to, and are therefore not necessarily comparable with, similarly titled measures of other companies. However, we have included pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc herein because Dole Plc’s management believes that pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc are useful performance measures for it. These non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our operating results or cash flows as reported under U.S. GAAP.

 

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In calculating these non-GAAP financial measures, Dole plc makes certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating Dole Food Company’s non-GAAP financial measures, you should be aware that Dole plc may, in the future, incur expenses that are the same as or similar to those eliminated or adjusted for in this presentation. Our presentation of these non-GAAP financial measures should not be construed as an inference that Dole plc’s future results will be unaffected by any such adjustments. The non-GAAP information in this prospectus should be read in conjunction with Dole plc’s audited consolidated financial statements and the related notes included elsewhere in this prospectus. A reconciliation of these non-GAAP measures to net income, the most directly comparable measure calculated in accordance with U.S. GAAP, is set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

 

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all the information you should consider before making an investment decision. You should read this entire prospectus carefully, including the sections entitled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company” and our consolidated financial statements and the accompanying notes included elsewhere in this prospectus, before making an investment decision. See “—About this Prospectus—Basis of Presentation” for certain defined terms and the basis for certain information used herein.

Company Overview

We are the premier global leader in fresh fruits and vegetables. We offer over 300 products grown and sourced both locally and globally from over 30 countries in various regions, which are distributed and marketed in over 80 countries, across retail, wholesale, and foodservice channels. Our most significant products hold leading positions in their respective categories and territories. By way of example, we are one of the world’s largest producers of fresh bananas and pineapples, one of the leaders in Value Added Salads (based on U.S. Nielsen data as of April 24, 2021) and Fresh Packed Vegetables (based on Dole estimated rankings) in the United States, and have a growing presence in categories such as berries, avocados, and organic produce. The fresh fruits and vegetables segment had total sales of $335 billion in 2019 in North America and Europe according to GlobalData. In fiscal year 2020 fresh fruits and fresh vegetables represented 72% and 28% of pro forma Revenue, respectively, with North America and Europe contributing 49% and 45% of pro forma Revenue, respectively.

Our business is aligned with both environmental and social themes as we market the most nutritious foods along with the lowest carbon, water and ecological footprints of all the primary food groups (per the Barilla Foundation & Research Unit on Nutrition, Diabetes and Metabolism (“Barilla”)). Fresh fruits and vegetables and plant-based products in general are associated with the lowest greenhouse gas emissions of all other staple foods. From a social perspective, the importance of eating fresh fruits and vegetables has long been recognized as core to any healthy eating strategy. Our goal is to build a healthier, more sustainable tomorrow by increasing per capita consumption of fruits and vegetables today with a clear mission to “Make the World a Healthier Place.”

Our business operates through a number of business-to-business and business-to-consumer brands, the most notable being our iconic DOLE brand. DOLE is the most recognized brand within fresh produce in the United States. This is evidenced by 73% fresh fruit unaided consumer brand awareness (measured by asking the following question to survey responders—‘Which fresh fruit brands do you know, even if only by name?’), 42 percentage points higher than that of our closest competitor, according to a survey conducted in 2020 by IPSOS across 15 fruits and vegetables brands with a sample size of 1,000 people aged 18-75 years old in the United States. Notably, 55% of respondents to this same survey nominated DOLE as their favorite fruit brand. The DOLE brand is well established and also has a growing appeal with younger millennial shoppers, ranking within the ten fastest growing brands among millennials in the United States in 2019 according to Morning Consult. We believe that consumers and retailers in our key markets recognize and associate the DOLE brand with healthy, high quality and premium food products and the brand is very much aligned with health and wellness trends.


 

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Our business philosophy is to be local at heart but global by nature. Our business model is centered around creating a vertically integrated business including our own production and sourcing capabilities as well as control areas of the supply chain and distribution. Our global production, sourcing and logistics capabilities, coupled with on-the-ground local expertise, presence, and distribution network, allow us to market a diverse and differentiated set of global products within the local territories we serve. Additionally, our owned acreage combined with a multi-continental sourcing model, provides us with operating flexibility and product availability throughout the year. Within many territories in Europe we operate a partnership model with our grocery retail customers, offering fresh produce category holistic management solutions and in some cases managing entire categories within their stores.

Our vertically integrated business model is supported by a valuable and extensive strategic infrastructure and asset base with total pro forma assets of approximately $4.7 billion as of December 31, 2020. As of March 31, 2021, we owned approximately 109,000 acres of farms and other land holdings around the world, including approximately 5,000 acres of actively marketed surplus land for sale in Oahu, Hawaii. In addition, as of March 31, 2021, we owned a fleet of ten refrigerated container carriers and six pallet friendly conventional refrigerated ships. We also owned or leased approximately 16,800 refrigerated containers and 740 dry containers. The breadth and depth of our local presence is evidenced by approximately 250 facilities globally, including approximately five salad manufacturing plants, twelve cold storage facilities, 75 packing houses and 162 distribution and manufacturing facilities. In addition to our owned asset base, we have developed long-standing relationships with independent growers across the globe, including international partnerships and joint ventures, which provide us additional operational flexibility and extended range and availability.

 

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Our strategic asset base is complemented by an experienced and industry leading organization. As of December 31, 2020, we had approximately 40,000 employees across 29 countries. We believe our people represent a key differentiating aspect of the business providing both produce sector expertise as well as local insights and relationships.

We are focused on being an enthusiastic, powerful advocate of good diet, health and well-being, and supporting consumers in making healthier choices by consuming more fruits and vegetables. We are committed to continuously improving our practices and enhancing our sustainability measures across our organization. We are building upon our existing ambitious sustainability targets for the future, determined to consolidate our position as an industry leader and make a positive impact on society and on the environment through our operations.


 

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Dole plc is a newly formed entity, the result of the combination of Dole Food Company and Total Produce, two complementary, synergistic and culturally aligned organizations each with more than 150 years of history in the fresh produce industry. The merger will require integration between the two companies, a process that already started in the first step of this combination in 2018 when Total Produce acquired a 45% stake in Dole Food Company’s parent company. Going forward, Dole plc will be re-organized by the following segments: Fresh Fruit, Fresh Vegetables, Diversified Fresh Produce - EMEA and Diversified Fresh Produce - Americas & ROW. We believe this organizational structure will allow us to continue serving our existing customers with the exceptional quality that they have come to associate with the brands we market, and drive significant growth and cost benefits through the realization of operational synergies across the enlarged business.

 

 

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For fiscal year 2020, Dole plc had pro forma Revenue of $9.0 billion, pro forma Operating Income of $208.0 million, pro forma net income attributable to Dole plc of $80.1 million, pro forma Adjusted net income attributable to Dole plc of $123.7 million and pro forma Adjusted EBITDA of $370.8 million inclusive of transaction adjustments (or $383 million, excluding transaction adjustments of $12 million). For additional information regarding pro forma Adjusted net income and pro forma Adjusted EBITDA, including a reconciliation to net income attributable to Dole plc, see “Non-GAAP Financial Measures” and “Summary Historical and Pro Forma Consolidated Financial Information.”

 

 

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Industry Overview and Market Opportunity

We primarily operate in the North American and European markets for fresh fruits and vegetables. The two markets combined have a total size of $335 billion, with just over $139 billion and $196 billion in sales in 2019 in North America and Europe, respectively, according to GlobalData. On a combined basis, the market for fresh fruits and vegetables is expected to grow at an annualized rate of 2.7% from 2020 to 2025, with Europe growing 2.1% and North America 3.4%. From 2015 to 2019, the fresh fruits and vegetables segment grew at an annualized rate of 1.9%, with Europe and North America growing 1.5% and 2.5%, respectively.

The UN General Assembly’s designation of 2021 as the “International Year of Fruits and Vegetables” recognizes the pivotal contribution of fresh produce across global health, nutrition and sustainability. Consumers in developed economies remain focused on improving health & wellness and are increasingly shifting their consumption towards healthier, natural, fresh and whole foods such as fruits and vegetables and away from processed foods and animal meat and proteins.

Consumers are also increasingly demanding products produced in a sustainable and responsible manner. According to a recent survey by Empathy Research 57% of global respondents are making more of an effort to reduce their carbon footprint and have greater care for the environment. Additionally, 47% of global respondents reported that ethically and sustainably sourced ingredients are more important to them now than before the pandemic. Given the fresh produce industry has the lowest environmental footprint across all food categories, per Barilla, fruits and vegetables consumption is aligned with sustainable consumption. Consumers are also increasingly demanding local produce, with 28% of global respondents looking to buy food that is produced as close to where they live as possible, per Empathy Research. We believe we are well positioned to capitalize on these


 

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trends through our dual global and local farming and sourcing capabilities. Fresh produce is also a key growth driver in grocery stores, contributing to higher footfall at the perimeter of the store at the expense of center of store, as evidenced by U.S. Nielsen data for the period between 2017 and 2019. While the center of store briefly outpaced produce during the COVID-19 pandemic as consumers sought the security of pantry loading, in the 26 weeks ending February 27, 2021 produce regained its position as a key growth driver with 11% growth over this time period compared with 10% growth for center of store categories per U.S. Nielsen dollar sales data.

Food retailers have sought to embrace these consumer trends towards health & wellness and sustainable consumption by continuing to focus on the fresh produce aisle as a core perimeter-of-store category and footfall driver. This is evidenced by 74% of consumers buying fresh food at least once a week, per Deloitte, and 45% of consumers believing it is now more important to buy healthy food compared to before COVID-19, per Bain & Company.

Within the produce category we have seen higher growth in categories such as berries, avocados, organic produce, and Value Added Salads, with annualized growth rates of 7.9%, 7.1%, 10.6% and 8.4%, respectively, from 2018 to 2020, per our calculations based on data provided by Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter). Further, over the past several decades, consumers have become more interested in the benefits of organic foods given increased focus on health and nutrition. In more recent years, according to our calculation based on U.S. Nielsen data, there has been a 10.6% CAGR in organic produce from 2018 through 2020, and uptick to 16.3% growth in 2020, calculated by reference to Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter).

 

Historical and Projected Fresh Fruit & Vegetable Industry (North America and Europe)

 

North American and European fresh fruit and vegetable growth is expected to accelerate
driven by consumer trends towards health &
wellness and more nutritious foods

 

 

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Source: GlobalData

Our Competitive Strengths

We believe that the following strengths position us to develop and maintain the competitive advantages and leading positions that are critical to our continued success.


 

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An Established Global and Local Leader in a Large and Structurally Growing Category

We are the premier global supplier of fresh produce with pro forma Revenue of $9.0 billion, maintaining a global footprint and leadership positions across multiple attractive product categories. The fresh fruits and vegetables combined North American and European market is expected to generate 2.7% annualized growth from 2020 to 2025, growing from $349 billion to $398 billion. We believe consumer trends including plant-based and flexitarian diets, environmental consciousness and sustainable consumption, convenience, and health & wellness are the drivers of an acceleration in projected growth. Dole plc is approximately twice as large in revenue as compared to its nearest competitor and thus we believe we are favorably positioned to capitalize on this projected structural industry growth.

We are the #1 leader for bananas in North America and hold the #2 position for bananas in Europe. We also hold the #2 position for pineapples in North America and Europe, the #2 position for Value Added Salads in the United States, and are the #1 global exporter of grapes. Additionally, we benefit from increased size and presence in attractive growth categories such as organic produce, avocados and berries. According to our calculation by reference to Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter), 2018 to 2020 CAGR for organic produce was 10.6%, avocados was 7.1%, berries was 7.9% and Value Added Salads was 8.4%. While the produce industry is competitive and comprises a large number of strong operators, we believe that our size creates differentiation and allows us to maximize operational efficiency and maintain a low-cost positioning that creates differentiation and is difficult to replicate.

 

Largest Produce Peers by Revenue

(in billions)

 

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Source: Latest public filings, 3rd party research.

Note: Represents Dole plc FY 2020 pro forma revenue. Figures presented for other fresh produce companies represent their group revenue as reported. The list of companies includes large European and North American fresh produce companies, which are the principal markets where Dole plc trades and for which companies the revenue numbers are publicly reported. We consider these companies to be comparators in the fresh produce industry and in the principal markets in which we trade. The list excludes large European and North American produce businesses for which revenues are not publicly reported or which we do not consider as relevant comparators, produce businesses which are based outside of Europe and North America and smaller-sized companies in all markets.


 

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Source: Nielsen 2018-2020 Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter).

Note: Bananas and Pineapples leadership figures are Dole estimated Latin sourced fruit (includes conventional bananas sourced from Colombia, Honduras, Panama, Mexico, Nicaragua, Guatemala, Ecuador, Peru and Costa Rica; organic bananas sourced from Ecuador, Colombia, Peru and Mexico; conventional and organic pineapples sourced from Ecuador, Colombia, Costa Rica, Honduras, Panama, Mexico and Guatemala). Grapes leadership figure is Dole estimated from Southern Hemisphere. Leadership figures for bananas, pineapples and grapes are based on product sold into all market segments (retail, wholesale, etc.) as compared to market participants with a material market presence (market participants with a limited or immaterial market presence were not used in the comparison). Value added salads leadership figures are based on U.S. Nielsen data as of April 24, 2021, of U.S. retail sales, with market participants selected by Nielsen and including participants with a material market presence and excluding those with a limited or immaterial market presence.

Highly Diversified Product and Services Offering, Sourcing and Customer Base

The combination of Total Produce’s and Dole Food Company’s complementary businesses creates a diversified and well-balanced portfolio with enhanced resilience which we believe uniquely positions us for sustainable and profitable growth. In fiscal year 2020 fresh fruit and fresh vegetables represented 72% and 28% of pro forma Revenue, respectively, with North America and Europe contributing 49% and 45% of pro forma Revenue, respectively. We offer over 300 products grown and sourced both locally and globally from over 30 countries in various regions, which are distributed and marketed in over 80 countries, across retail, wholesale, foodservice and ecommerce channels. Our diverse product offering allows us to reach a broad global consumer base that is increasingly demanding product availability all year round.


 

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Adverse weather conditions, natural disasters and geopolitical conditions are some of the challenges to operating in the produce industry. By maintaining hundreds of grower relationships across North America, Europe, South America, Africa, New Zealand and other geographies, we are similarly not dependent upon any one geographic area or grower for the sourcing of our products. This reduces risk from exposure to natural disasters and political disruptions, while allowing access to the highest quality products throughout the year. In fiscal year 2020, no third-party grower represented more than 10% of the sourced volume for any significant product.

Our customers are leading retail, wholesale and foodservice customers in North America, Latin America and Europe, none of which contributed more than 10% of total sales in fiscal year 2020.

 

Dole plc Product Mix

 

Dole plc Geographic Mix

 

 

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Note: Based on FY 2020 pro forma Revenue   Note: Based on FY 2020 pro forma Revenue

Diversified Sourcing Network

 

 

 

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Note: Maps represent main sourcing locations and not reflective of the entire Dole plc sourcing network.

Iconic DOLE Brand with Industry Leading Customer Awareness

The DOLE brand is the most recognized and trusted brand in fresh fruit in the United States, as evidenced by our 73% unaided consumer brand awareness, which is 42 percentage points higher than that of our closest competitor, according to a survey conducted in 2020 by IPSOS. Additionally, 84% of respondents in the same IPSOS survey declared that Dole Food Company has quality products, 85% of respondents identified DOLE as a likeable brand, 55% of respondents nominated DOLE as their


 

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favorite fruit brand, and 53% of respondents declared a willingness to pay a little more for the DOLE brand. Through our global marketing efforts, we believe we have made the distinctive red “DOLE” letters and sunburst a familiar symbol of freshness and quality, widely recognized by consumers around the world for providing healthy food products. The DOLE brand supports our leading positions in the segments we serve. Going forward, Dole plc intends to build upon the recognition and trust that the DOLE brand has earned to broaden its footprint, extend its categories, and attract new customers.

 

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Strong Control Over Supply Chain from Differentiated, Vertically Integrated Business Model

Dole plc is unique in its capacity to deliver the best of both worlds: the collective strength, resources and supply chain influence of a global leader with the service and market focus of a local operator. Our strategic asset base across the globe, with total pro forma assets of approximately $4.7 billion in fiscal year 2020, gives us superior control over production, processing, warehousing and transportation. Fresh produce is generally perishable and must be brought to market and sold soon after harvest, with selling prices depending on many factors including the availability and quality of the produce items. Our control over the supply chain positions us to consistently and efficiently deliver fresh fruits and vegetables to our consumers in pristine condition on a global scale.

Our quality starts on the farm. As of March 31, 2021, we owned over 109,000 acres of land around the world and leased approximately 14,000 acres. Locally, across each of the categories in which we operate, we have developed enduring relationships with hundreds of local growers, investing in their businesses and providing agronomic, commercial and promotional support. This broad ownership across regions of production assets provides the ability to manage costs and improve commercial opportunities with our independent growers, further strengthening our low cost positioning. In addition, as of March 31, 2021, we owned a fleet of ten self-sustained refrigerated container carriers and six pallet friendly conventional refrigerated ships with container-carrying capacity on deck. We have since taken delivery of one more self-sustained refrigerated container carrier, have sold one self-sustained refrigerated container carrier that had reached the end of its useful life, and are planning to sell three additional self-sustained refrigerated container carriers that have reached the end of their useful lives. On a go-forward basis, we will operate eleven of our vessels and charter two to a third party. We also cover part of our shipping requirements under contracts with existing liner services and occasionally charter vessels for short periods on either a time or voyage basis when required. We also owned or leased approximately 16,800 refrigerated containers, 740 dry containers, 5,500 chassis, 4,800 generator sets, and 250 facilities worldwide as of as March 31, 2021. Our supply chain gives us the tools to deliver on service, quality and cost. It also allows us to serve our customers with both the end-to-end solution and the supply chain transparency they are increasingly asking for.


 

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Dole plc is at the Forefront of Environmental and Social Issues, Marketing a Portfolio of Healthy, Nutritious and Sustainable Produce

We are grateful to market the most nutritious foods and products with the lowest carbon, water and ecological footprints of all the primary food groups, per Barilla. Our goal is to build a healthier, more sustainable tomorrow by increasing per capita consumption of fruits and vegetables today.

Dole Food Company and Total Produce have both publicly committed to numerous specific sustainability goals for 2025 and 2030 which are already broadly aligned. Dole plc plans to continue to enforce these efforts before merging them into a single set of goals in 2022. By way of example, some of the individual goals previously stated by Total Produce and Dole Food Company are:

 

   

Achieving 30% reduction in Total Produce group-wide market place emissions and net zero carbon emissions from Dole Food Company-owned farms;

 

   

Achieving 100% optimized water practices in managed farms and packing facilities;

 

   

Ensuring all group banana and pineapple packaging is recyclable or compostable;

 

   

Reducing shipping emissions by 30%;

 

   

Hitting 750 million cumulative impressions promoting health and well-being across Dole Media platforms;

 

   

Investing $0.07 per box of Dole Food Company bananas to fund local social impact projects;

 

   

Implementing blockchain product-tagging technology or advanced traceability solutions; and

 

   

Extending the use of SEDEX, which is one of the world’s leading online platforms for companies to manage and improve working conditions in global supply chains, to all Total Produce operations.


 

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Our deep commitment to sustainability is rooted in transparency and impact as we aim to be among the highest SDG rated companies in the food industry by empowering consumers, offering a wide range of fair trade and organic fresh fruits and vegetables, and remaining steadfast in our expectation for the best sustainable practices from those with whom we do business.

 

Greenhouse Gas Emissions Per Kilogram of Food Product

(kg CO2-equivalents Per kg Product)

 

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Source:

Vox (“How to reduce your food’s carbon footprint, in 2 charts,” 2020).

Executive Board and Management Teams with a Track Record in Delivering Growth

The respected management teams of Total Produce and Dole Food Company, each of which have long and extensive experience in the fresh produce sector, will lead Dole plc. Carl McCann will preside over the group’s activities as Executive Chairman and will lead our long-term strategy together with the executive management team. Our day-to-day operations will be led by Chief Executive Officer Rory Byrne, Chief Operating Officer Johan Lindén and Chief Financial Officer Frank Davis. For more information, please see the detailed biographies in the section entitled “Management — Directors and Executive Officers.” Dole plc is organized around a segmental structure that is led by executives with extensive industry experience who are recognized as amongst the best in the fresh produce sector. Each segment has built a strong management team and culture, focused on accountability and delivery of results. The business segments are supported by specialist corporate functions.

Our Employees Are Amongst Our Greatest Competitive Advantage, and We Pride Ourselves in Attracting and Retaining Some of the Most Experienced and Accomplished People in the Sector

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employer by cultivating a positive and engaging culture. The key characteristics of our organization include employee inclusion, well-being, safety, training, career development and community involvement. We have adopted strategic priorities such as “the people behind the produce,” which formalizes our policy for assessing culture and engagement in our local businesses. Our employment practices include encouraging and facilitating collaboration, practicing a nondiscriminatory policy and being an equal opportunity employer across the globe. Our employees bring together local expertise and global perspectives, where embracing change is part of our way of working. As a result, our “can do” customer-centered culture is one in which our people are ambitious, progressive, resourceful and resilient.

Reinforced, Stronger Operating Financial Profile that Has Shown Strong Resilience Through COVID-19

Our financial profile is characterized by a combination of growth and resilience, resulting from our diversified exposure by both segment and geography and diversified growing and sourcing. Throughout the COVID-19 pandemic, we benefitted from robust retail and wholesale demand, which helped to offset reduced levels of activity in the food service sector. In 2020, Total Produce grew revenue 4.3% to $4.3 billion, while Dole Food Company grew revenue 3.5% to $4.7 billion, both of which represented faster growth rates than those achieved in 2019. Furthermore, through our leading retailer partners, we expect to continue our ecommerce momentum, with such business channel witnessing accelerated growth during the pandemic. We believe Dole plc will benefit from an enhanced balance sheet and strong cash flow generation, which, supported by sustainable growth and earnings resilience, and additional revenue and cost benefits as a result of the Transaction, will position Dole plc to fund and maintain an attractive dividend pay-out.

Our Growth Strategy

Continue to Invest in a Large and Structurally Growing Fresh Produce Market

As the global #1 in fresh produce with pro forma Revenue of $9.0 billion for fiscal year 2020, we believe Dole plc will be well positioned to benefit from the future growth of the $335 billion combined North American and European fresh fruits and vegetables segment that is expected to grow to $398 billion in 2025 and at a 2.7% five-year CAGR from 2020 to 2025. As the largest player in this market, we have a responsibility and will continue to invest in the fruits and vegetables category to ensure consumers are informed of the benefits of a nutritious diet rich in fresh fruits and vegetables as well as the environmental sustainability benefits. Health-conscious consumers are driving much of the growth in demand for fresh produce, a trend that continues to accelerate as evidenced by the fact that 65% of respondents to a global survey performed by Empathy Research indicated they are making an effort to eat healthier. Examples of such initiatives include teaching 48,000 Irish children across 1,323 schools to grow fruits and vegetables and our ongoing U.S. partnership with Disney since 2016 to promote healthy living. We anticipate continuing such initiatives and partnerships focused on informing our consumers of the benefits of this category.

Expand Our Presence in Growing Categories Including Organics, Value Added Salads, Avocados and Berries

We are seeing strong growth in a number of sub-categories within fruits and vegetables including organics, Value Added Salads, avocados and berries. We intend to capitalize on our enhanced position to drive further growth and market share gains in these categories.

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according to The Packer. We are committed to using our network to widen the availability and bring an increasing range of organic, sustainable products to market. Just within the U.S., organics is an $8.5 billion category that has experienced 10.6% growth from 2018 to 2020 per our calculations based on data provided by Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter). Dole plc is a large player in organics with pro forma 2020 organic sales of approximately $700 million across bananas, pineapples and other fruits and vegetables. We believe our global sourcing network, expertise and customer base make us well positioned for growth and increased market share in this category.

Value Added Salads is another growing category with consumers citing convenience, health & wellness and snacking as factors contributing towards increasing purchases according to The Packer. Within the U.S., Value Added Salads is a $6.9 billion category that has experienced 8.4% growth from 2018 to 2020 per our calculations based on data provided by Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter). Dole plc is a strong player with 2020 pro forma sales of approximately $1 billion in the sub-category and has an established and well invested manufacturing footprint to support our operations. Our strategy is to continue to innovate, collaborate and utilize the DOLE brand to drive growth and take share in this category. Our offerings will include ready-to-eat, meal kits, and bagged salads, all utilizing the trusted DOLE brand as a reassuring promise of consistency and quality.

Berries and avocados remain two high growth sub-categories with increasing consumption driven by taste and functional benefits. Within the U.S., avocados is a $2.7 billion category that has experienced 7.1% growth and berries is a $7.4 billion category that has experienced 7.9% growth, both from 2018 to 2020 per our calculations based on data provided by Nielsen Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter). Dole plc has a growing position with approximately $700 million of pro forma berry and avocado sales. Going forward, Dole plc intends to further develop these businesses by developing newer varieties through closer collaboration with growers, using production assets to connect consumers to the source and by utilizing current infrastructure to achieve a more efficient route to market in the U.S. and Europe.

Further Leveraging the DOLE Brand Within Europe

The DOLE brand is the most recognized and trusted brand in fresh fruit in the United States, as evidenced by our 73% unaided consumer brand awareness, which is 42 percentage points higher than that of our closest competitor, according to a survey conducted in 2020 by IPSOS. Additionally, 84% of respondents in the same IPSOS survey declared that Dole Food Company has quality products, 85% of respondents identified DOLE as a likeable brand, 55% of respondents nominated DOLE as their favorite fruit brand, and 53% of respondents declared a willingness to pay a little more for the DOLE brand.

The DOLE brand is underrepresented in Europe and we see an opportunity to grow it in countries including U.K., France, Ireland, Spain and Portugal. These are markets where Total Produce has an established presence with distribution and manufacturing facilities. We believe utilizing the DOLE brand will also allow us to differentiate our fruits and vegetables and create enhanced value as has been accomplished by the brand in the U.S.

Benefit from Combined Consumer Insights and Strategic Partnerships to Drive New Product Development and Innovation

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operational efficiencies and sustainability. We launched our Kostministieriet (“Ministry Of Food”) initiative, which is dedicated to garnering deeper insights into consumption motivators and inhibitors for choosing more fresh fruit and vegetables, across 10 European nations.

We recently announced a strategic partnership with Elo Life Systems, a food and agricultural biotechnology company with a mission to create novel products that enhance the nutrition and diversity of the global food supply. Together, we will aim to develop multiple new banana varieties, including improved versions of Cavendish, with enhanced resistance to fungal diseases such as Fusarium wilt.

Dole plc is committed to continue offering health-conscious consumers, including those following plant-based and flexitarian diets, with a growing number of premium meals and snack options. Over the past three years, Dole plc has launched 252 new SKUs under the DOLE brand and private labels, generating $180 million in additional sales. In addition to innovative products, Dole plc is focused on new innovative packaging solutions that are unique and environmentally sustainable.

Additionally, our research across logistics and operations is orientated towards delivering cost and sustainability-related improvements, as well as simplifying the supply chain. Recent initiatives include trials for The Internet of Things (“IoT”) solutions, which have focused on the transmission of key supply chain data in real time, and the development of innovative direct-to-consumer solutions in our “No Waste” facility in Helsingborg, Sweden. We will continue to focus on the development of user-friendly platforms to measure and manage the sustainability impact of our business globally. Our Insight App tool was developed in 2020 to profile growing regions globally on the basis of core sustainability metrics.


 

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Optimize Our Supply Chain, “Setting Our Service Apart”

Dole plc will offer a compelling proposition for global customers by delivering efficiencies through collaboration across our global procurement and distribution networks. For instance, South Africa and Chile are important sourcing regions for Dole plc, and by coordinating group-wide procurement and logistics from both countries, we will be able to increase volumes and deliver economies of scale within the group. Additional supply chain benefits include increased collaboration across inland freight and logistics in North America and Europe, further development of third-party logistics offerings, and a strategic approach to the coordination of global sea freight management. We aim to enhance the supply chain responsiveness of our operating companies and deliver real-time solutions, which is further enhanced by our broader combined access to market intelligence. We believe our supply chain optimization will differentiate us from competitors and add value by streamlining the route to market, refining direct sourcing models and assuring best practices in quality and sustainability through our greater supply chain influence.

Continued Enhancement Across the Supply Chain Through Innovation Programs

 

 

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Continue to Focus on Synergistic M&A in a Fragmented and Structurally Growing Market

Dole plc’s well-capitalized balance sheet will position the company to benefit from acquisitions and development opportunities within a fragmented industry. Both Total Produce and Dole Food Company have extensive histories of acquisitions in the fresh produce sector, which has allowed them to build highly specialized capabilities in the industry and expand geographically. Total Produce has grown through acquisitions and over the 15 years following the 2006 separation from Fyffes has completed more than 100 acquisitions. These acquisitions are of varying sizes across four continents, from transformational investments such as the investment in DFC Holdings, to smaller, bolt-on investments. These transactions have been a driver of Total Produce’s continued expansion with revenue more than tripling during this time, from $2.1 billion in 2006 to $7.1 billion in 2020 (which includes Total Produce’s share of joint ventures and associates). Similarly, Dole Food Company has experience in successful M&A, with recent focus on the acquisition of strategic assets and a continuous evaluation of the returns on existing assets to constantly improve the efficiency of its capital allocation process.

Total Produce Has Completed More Than 100 Acquisitions Since its Separation From Fyffes

 

 

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Note:

Includes select Total Produce investments since 2006. Percentage represents ownership stake.

The Transaction

On February 16, 2021, we entered into the Transaction Agreement (as amended on April 23, 2021 and from time to time thereafter) with the other Total Produce Parties, DFC Holdings and the C&C Parties, pursuant to which Total Produce has agreed to combine with DFC Holdings under the Company and, upon the terms and subject to the conditions set forth in the Transaction Agreement, complete this offering as soon as possible thereafter.


 

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Upon the completion of the Transaction and this offering, the combined company will trade on the NYSE under “DOLE” and the existing Total Produce listings on the Euronext Growth Dublin and on the AIM London Stock Exchange will be discontinued.

Upon the terms and subject to the conditions set forth in the Transaction Agreement, as described more fully in “Description of the Transaction,” the Transaction will be effected in a series of steps including the following:

 

   

we will acquire 100% of the issued share capital of Total Produce in exchange for issuing our ordinary shares to Total Produce shareholders (the “Share Exchange”). We will be able to consummate the Share Exchange pursuant to the Scheme (as defined below) which became binding on all Total Produce shareholders on July 20, 2021;

 

   

immediately following the completion of the Share Exchange, we will consummate the Merger, with DFC Holdings surviving the Merger, and the C&C Parties will acquire our ordinary shares; and

 

   

immediately following the completion of the Share Exchange and the Merger, we will sell our ordinary shares in this offering.

Immediately following the completion of the Transaction (as defined below) and prior to this offering, shareholders of Total Produce and the C&C Parties will own 82.5% and 17.5%, respectively, of our ordinary shares on a fully diluted basis.

Completion of the Share Exchange and the Merger is subject to the satisfaction (or waiver, to the extent permitted) of certain conditions, including the execution by the underwriters in this offering of an underwriting agreement containing certain pricing terms as more fully described in the section entitled “Description of the Transaction — Conditions to Completion.”

If the conditions to completion of the Share Exchange and the Merger are not satisfied or waived, then this offering will not occur and we will not sell any ordinary shares in this offering. In the event the Transaction and this offering are not completed for any reason, the terms of the 2018 Transaction (as defined below) will remain in effect, including the right of TP USA to exercise its options to acquire the Second Tranche and the Third Tranche (each as defined below).

For more information regarding the Transaction, including the representations, warranties, covenants and agreements contained in the Transaction Agreement, see “Description of the Transaction.”


 

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The following diagram shows our corporate structure immediately after completion of the Transaction and this offering.

 

 

LOGO

Our Structure

Immediately following this offering and the use of proceeds therefrom:

 

   

our ordinary shares will be beneficially held as follows: (i) 25,000,000 ordinary shares by investors in this offering (or 28,750,000 ordinary shares if the underwriters exercise their option to purchase additional ordinary shares in full); (ii) 56,181,381 ordinary shares by the TP Holders (which includes Balkan Investment Company and related parties (including Arnsberg Investment Company)) (or 56,181,381 ordinary shares if the underwriters exercise their option to purchase additional ordinary shares in full); and (iii) 11,917,263 ordinary shares by the C&C Parties (or 11,917,263 ordinary shares if the underwriters exercise their option to purchase additional ordinary shares in full); and

 

   

the combined voting power in the Company will be as follows: (i) 26.9% by investors in this offering (or 29.7% if the underwriters exercise their option to purchase additional ordinary shares in full); (ii) 60.3% by the TP Holders (which includes Balkan Investment Company and related parties (including Arnsberg Investment Company)) (or 58.0% if the underwriters exercise their option to purchase additional ordinary shares in full); and (iii) 12.8% by the C&C Parties (or 12.3% if the underwriters exercise their option to purchase additional ordinary shares in full).

Debt Facilities

On March 26, 2021 Total Produce entered into a credit agreement (the “Credit Agreement”) with Coöperatieve Rabobank U.A., New York Branch, as administrative agent and collateral agent, certain


 

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of its subsidiaries and the lenders party thereto. The Credit Agreement provides for a $500.0 million five-year multi-currency senior secured revolving credit facility (the “Revolving Credit Facility”), which is available to Total Produce and certain of its subsidiary co-borrowers.

The Credit Agreement also provides for a $940.0 million seven-year U.S. dollar senior secured term loan “B” facility (the “Term Loan B Facility”) with Bank of America, N.A., as administrative agent, to be available to TP USA upon the consummation of certain conditions provided therein, including the consummation of the Completion (as defined below). In addition, Dole plc and certain Dole Food Company subsidiaries expect to have access to the Revolving Credit Facility subject to the satisfaction or waiver of certain customary conditions and the consummation of the Completion.

In connection with the consummation of the Completion, the Credit Agreement is expected to be amended to provide for an increase in the Revolving Credit Facility to $600.0 million, a decrease in the Term Loan B Facility to $540 million and a new $300.0 million five-year U.S. dollar senior secured term loan A facility (the “Term Loan A Facility and, together with the Term Loan B Facility, the “Term Loan Facilities”; the Term Loan Facilities collectively with the Revolving Credit Facility, the “Facilities”). The Revolving Credit Facility and the Term Loan Facilities will be syndicated. We anticipate that $356.0 million under the Revolving Credit Facility will be drawn upon consummation of the Completion, resulting in net proceeds (when aggregated with the net proceeds of the Term Loan Facilities) to Total Produce of approximately $1,179.0 million, after deducting fees and expenses (including original issue discount with respect to the Term Loan Facilities). Proceeds of the Facilities will be used to repay in full Dole Food Company’s existing credit facilities and senior secured notes and in connection with the Completion, certain bilateral facilities of Total Produce will be terminated.

As of March 31, 2021, after giving effect to the Transaction and the consummation of debt financing in connection with the Transaction, we would have had $1,920.0 million of outstanding indebtedness. Following the completion of this offering and after giving further effect to the debt refinancing as referenced above and our planned use of a portion of the net proceeds to be received by us from this offering to repay outstanding debt, as described under “Use of Proceeds”, we would have had $1,398.0 million of outstanding indebtedness, as of March 31, 2021. The net proceeds from this offering are critical to providing a long-term sustainable capitalization for Dole plc. This is expected to create a stronger balance sheet, enhance Dole plc’s credit profile, and lower its average cost of capital going forward.

COVID-19 Update

The COVID-19 outbreak continues to be an ongoing challenge for us and the wider fresh produce industry. The health and well-being of our people is our number one priority while at the same time recognizing the vital role in continuing to keep the supply chains open and supplying essential foodstuffs. Our strong presence in the global fresh produce industry, the diversity of its operations and products together with the exceptional response from our people have enabled us to meet these challenges. For more information on the impact of the COVID-19 pandemic on our business, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company—Impact of COVID-19 Pandemic.”

Summary Risk Factors

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.


 

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Risks Related to Our Business and Industry

 

   

Adverse weather conditions and other natural conditions can adversely affect our business.

 

   

Our business is highly competitive and we cannot assure you that we will maintain our current market share.

 

   

Global capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our suppliers and customers.

 

   

Currency exchange fluctuations may impact the results of our operations.

 

   

Increases in commodity or raw product costs could adversely affect our operating results.

 

   

We are subject to the risk of product contamination and product liability claims.

 

   

Adverse perception, events or rumors relating to our brand could significantly negatively impact our business.

 

   

We may face risks related to servicing our substantial debt.

 

   

Our earnings are subject to seasonal variability and market demand for our products.

 

   

We expect to expand our business, in part, through future acquisitions, but we may not be able to identify or complete suitable acquisitions, which could harm our business, financial condition and results of operations.

 

   

We usually extend credit to our key customers. Failure to collect, trade receivables, untimely collection or customer defaults could adversely affect our liquidity.

 

   

We are subject to risks related to our use of pesticides.

 

   

Goodwill and other intangible assets are subject to the risk of future impairments which could adversely impact our operating results.

 

   

We are exposed to labor risks, including those related to immigration laws and labor disputes.

 

   

We are subject to risks relating to our information systems.

 

   

We may face risks arising from our dependence on information technology and from social media.

 

   

We may face risks from our currently underfunded defined benefits plans.

 

   

We are subject to risks related to international operations, including terrorism, war, Brexit, global pandemics, including COVID-19 and trade policies.

 

   

We are highly regulated in the areas of food safety and protection of human health and the environment.

 

   

We are subject to transportation risks.

 

   

We are exposed to risks related to our use of GMOs.

 

   

An interruption at one or more of our manufacturing facilities could negatively affect our business, and our business continuity plan may prove inadequate.

 

   

If we lose the services of our key management, our business could suffer.

 

   

We are exposed to laws and regulation, including those related to climate change, agricultural policies, marketing, food labeling, food safety, anti-corruption and trade control.

 

   

We are dependent on our relationships with key suppliers and customers.


 

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We rely on protection of our intellectual property and proprietary rights.

 

   

We are subject to litigation risks.

 

   

Tax matters, including changes in tax rates, disagreements with taxing authorities and imposition of new taxes could impact our results of operations and financial condition.

Risks Related to the Transaction

 

   

Optimizing our operations may be more difficult, costly or time-consuming than expected and the anticipated benefits and cost savings of the Transaction may not be realized.

 

   

We have incurred significant transaction costs and may incur integration costs in connection with the Transaction.

 

   

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and our actual financial condition and results of operations following the Transaction may differ materially.

Risks Related to this Offering and Our Ordinary Shares

 

   

An active trading market for our ordinary shares may never develop or be sustained.

 

   

The market price and trading volume of our ordinary shares may be volatile, which could result in rapid and substantial losses for our shareholders.

 

   

Future offerings of debt or equity securities may adversely affect the market price of our ordinary shares and dilute existing shareholders.

 

   

Investors in this offering will suffer immediate dilution in net tangible book value per share.

 

   

If securities or industry analysts do not publish research or reports about our business or publish negative reports, our share price could decline.

 

   

United States investors may have difficulty enforcing judgments against us, our directors and executive officers and will have less protections as a result of our “foreign private issuer” status.

 

   

Certain provisions of Irish law and our Articles of Association could hinder, delay or prevent a change in control of us, which could adversely affect the price of our ordinary shares.

 

   

We will incur increased costs as a result of operating as a U.S. public company, including establishing and maintaining adequate internal controls over financial reporting and complying with Section 404 of the Sarbanes-Oxley Act.

Corporate Information

Our legal and commercial name is Dole plc. We were incorporated in Ireland on June 16, 2017 as a dormant company under the name Pearmill Limited. We changed our name to Dole Limited on April 13, 2021 and re-registered as a public limited company and changed our name to Dole plc on April 26, 2021. Our registered address is 29 North Anne Street, Dublin 7, D07 PH36, Ireland. As set forth in our Constitution, our purpose, among other things, is to carry on the business of a holding company and to coordinate the administration, finances and activities of any subsidiaries or associated companies.

Our telephone number is 353-1-887-2600, and our website address is www.doleplc.com. The information contained on, or that can be accessed through, our website is not part of this prospectus.


 

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THE OFFERING

 

Issuer

Dole plc

 

Ordinary shares offered by us

25,000,000 ordinary shares (or 28,750,000 ordinary shares, if the underwriters exercise their option to purchase additional ordinary shares in full).

 

Ordinary shares to be outstanding immediately after this offering

93,098,644 ordinary shares (or 96,848,644 ordinary shares, if the offering underwriters exercise their option to purchase additional ordinary shares in full).

 

Option to purchase additional ordinary shares

We have granted the underwriters an option to purchase up to 3,750,000 additional ordinary shares. The underwriters may exercise this option at any time within 30 days from the date of this prospectus. See “Underwriting (Conflict of Interest).”

 

Use of Proceeds

We will receive net proceeds of approximately $371 million (or approximately $428 million if the underwriters exercise their option to purchase additional ordinary shares in full) from the sale of the ordinary shares by us in this offering after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 

  We intend to use the net proceeds of this offering (i) to pay certain costs related to the Transaction and the consummation of the debt financing in connection with the Transaction; (ii) to repay, together with amounts available under the amended Credit Agreement, Dole Food Company’s outstanding 7.25% senior secured notes due 2025; and (iii) to repay in full, together with cash on hand and amounts available under the amended Credit Agreement, the existing Total Produce revolving credit facility.

 

  See “Use of Proceeds.”

 

Dividends

Following completion, Dole plc intends to pay quarterly cash dividends on our ordinary shares on a basis consistent with Total Produce’s historical dividend track record.

 

 

Any declaration and payment of future dividends to holders of our ordinary shares will be at the sole discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of


 

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dividends and other considerations that our board of directors deems relevant. The declaration, amount and timing of payment of any future dividends will therefore be subject to the recommendation of our board of directors based on its assessment of these factors at the time. Because we are a holding company and have no direct operations, we will only be able to pay dividends from our available cash on hand and any funds we receive from our subsidiaries.

 

  Any future determination to pay dividends will also be subject to applicable laws, including the Irish Companies Act 2014, as amended (the “Irish Companies Act”), which requires, among other things, Irish companies to have profits available for distribution (known as distributable reserves) equal to or greater than the amount of the proposed dividend. Unless we create sufficient distributable reserves from our business activities, the creation of such distributable reserves would involve a reduction of our share premium account (to the extent such share premium is available), which would require the approval of 75% of our shareholders present and voting at a shareholder meeting, and of the Irish High Court. See “Dividend Policy.”

 

NYSE Symbol

“DOLE.”

 

Risk Factors

See “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in our ordinary shares.
 

 

Conflict of Interest

Because an affiliate of Rabo Securities USA, Inc. is a lender under the existing Total Produce revolving credit facility and will receive 5% or more of the net proceeds of this offering due to the repayment of borrowings under the existing Total Produce revolving credit facility, Rabo Securities USA, Inc., an Underwriter in this offering, is deemed to have a “conflict of interest” under Rule 5121 (“Rule 5121”) of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Accordingly, this offering is being made in compliance with the requirements of FINRA Rule 5121. Pursuant to that rule, the appointment of a “qualified independent underwriter” is not required in connection with this offering as the members primarily responsible for managing the public offering do not have a conflict of interest. See “Underwriting (Conflict of Interest).”

 

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The number of our ordinary shares to be outstanding immediately after this offering excludes:

 

   

412,944 ordinary shares issuable upon exercise of share options to be issued under our equity incentive plan (the “Omnibus Incentive Plan”) in connection with the completion of this offering at an exercise price equal to the fair market value on the date of grant;

 

   

152,808 ordinary shares issuable upon vesting of restricted share awards to be issued under the Omnibus Incentive Plan in connection with the completion of this offering; and

 

   

7,447,891 ordinary shares reserved for issuance under the Omnibus Incentive Plan, which includes the 412,944 and 152,808 ordinary shares listed above.

Unless otherwise indicated, the information in this prospectus assumes the following:

 

   

except as otherwise specified in this prospectus, the completion of the Transaction on the terms set forth in the Transaction Agreement, including the issuance of a total of 68,098,644 of our ordinary shares to the TP Holders and the C&C Parties; and

 

   

no exercise by the underwriters of their option to purchase additional shares.


 

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following tables present the summary consolidated financial information of Total Produce and DFC Holdings for the periods and as of the dates indicated. Following this offering, both Total Produce and DFC Holdings will be considered our legal predecessors.

The summary consolidated statements of operations and statements of cash flows data of Total Produce for the fiscal years ended December 31, 2020, 2019 and 2018 and the summary consolidated balance sheet data as of December 31, 2020 and 2019 have been prepared in accordance with U.S. GAAP and are derived from the audited financial statements of Total Produce that are included elsewhere in this prospectus. The summary consolidated statements of operations and statements of cash flows data for the quarters ended March 31, 2021 and 2020 and the summary consolidated balance sheet data as of March 31, 2021 have been prepared in accordance with U.S. GAAP and are derived from the unaudited financial statements included elsewhere in this prospectus. Historical results for any prior period are not necessarily indicative of results to be expected in any future period.

The summary consolidated statements of operations and statements of cash flows data of DFC Holdings for the fiscal years ended December 31, 2020, December 28, 2019 and December 29, 2018 and the summary consolidated balance sheet data as of December 31, 2020 and December 28, 2019 have been prepared in accordance with U.S. GAAP and are derived from the audited financial statements of DFC Holdings that are included elsewhere in this prospectus. The summary consolidated statements of operations and statements of cash flows data for the quarters ended March 31, 2021 and 2020 and the summary consolidated balance sheet data as of March 31, 2021 have been prepared in accordance with U.S. GAAP and are derived from the unaudited financial statements included elsewhere in this prospectus. Historical results for any prior period are not necessarily indicative of results to be expected in any future period.

The summary unaudited pro forma condensed consolidated financial information is presented to illustrate the estimated effects of the Transaction, this offering and the other transactions as described in “Unaudited Pro Forma Condensed Consolidated Financial Information.” The summary unaudited pro forma condensed consolidated financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the Company’s condensed consolidated results of operations actually would have been had the Pro Forma Transactions (as defined below) been completed as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future operating results of the Company. The unaudited condensed consolidated pro forma financial information does not include adjustments to reflect any potential revenue synergies or cost savings that may be achievable in connection with the Pro Forma Transactions.

You should read the summary financial information presented below in conjunction with the information included under the headings “Description of the Transaction,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and DFC Holdings,” “Unaudited Pro Forma Condensed Consolidated Financial Information” and the financial statements and the related notes included elsewhere in this prospectus.


 

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     Dole plc Pro Forma  
     Fiscal Year
Ended
December 31,
2020
    Quarter
Ended
March 31,

2021
 
     (U.S. Dollars and shares in
thousands, except per share
amounts)
 

CONSOLIDATED STATEMENT OF OPERATIONS DATA (period ended)

    

Revenue

   $ 8,970,338     $ 2,269,014  

Cost of sales

     (8,274,291     (2,047,078
  

 

 

   

 

 

 

Gross profit

     696,047       221,936  

Selling, marketing and general and administrative expenses

     (488,088     (135,124
  

 

 

   

 

 

 

Operating income

     207,959       86,812  

Other income (expense), net

     (15,030     4,941  

Interest income

     5,735       1,108  

Interest expense

     (71,421     (12,777
  

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and income from investments accounted for under the equity method

     127,243       80,084  

Income tax expense

     (43,889     (23,165

Earnings from equity method investments

     17,317       1,304  
  

 

 

   

 

 

 

Net Income

     100,671       58,223  

Less: Net income attributable to non-controlling interests

     (20,618     (5,546
  

 

 

   

 

 

 

Net income attributable to Dole plc

   $ 80,053     $ 52,677  
  

 

 

   

 

 

 

Earnings per share—Basic

   $ 0.8599     $ 0.5658  

Earnings per share—Diluted

   $ 0.8599     $ 0.5658  

Weighted average shares outstanding—Basic

     93,099       93,099  

Weighted average shares outstanding—Diluted

     93,099       93,099  

CONSOLIDATED BALANCE SHEET DATA (at period end)

    

Cash and cash equivalents

       200,000  

Current assets

       1,658,000  

Total assets

       4,660,500  

Current liabilities, less current portion of debt

       1,337,000  

Long-term debt, net

       1,235,000  

Total liabilities and equity

       4,660,500  

Total equity

       1,245,500  

NON-GAAP INFORMATION AND OTHER FINANCIAL DATA:

    

Cash paid for capital expenditures

     (113,806     (49,382

Reconciliation of net debt

    

Total debt

       1,398,000  

Cash and cash equivalents

       (200,000
    

 

 

 

Net debt

       1,198,000  

Reconciliation from net income to adjusted EBITDA

    

Net income

   $ 100,671     $ 58,223  

Interest expense

     68,818       12,360  

Income tax expense

     43,889       23,165  
  

 

 

   

 

 

 

EBIT

     213,378       93,748  
  

 

 

   

 

 

 

Depreciation and amortization

     122,393       31,013  

Acquisition related costs

     19,420       7,164  

Net unrealized (gain) loss on derivative instruments

     (11,296     463  

Net unrealized (gain) loss on foreign denominated intercompany borrowings

     15,218       (5,858

Net non-cash settled realized loss on foreign intercompany borrowings

     4,908        

Fair value movements on contingent consideration

     519       41  

Impairment of property, plant and equipment

     1,210        

Asset write-downs, net of insurance proceeds

     1,428       (9,880

Restructuring charges

     1,304        

(Gain) on asset sales

     (7,547      

(Gain) on acquisition or disposal of business

     (14,790     (1,539

Legal matters

           15,000  

COVID-19

     10,877        

Items in earnings for equity method investments

    

Group share of depreciation

     5,367       1,579  

Group share of tax charge

     4,154       855  

 

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     Dole plc Pro Forma  
     Fiscal Year
Ended
December 31,
2020
    Quarter
Ended
March 31,

2021
 
     (U.S. Dollars and shares in
thousands, except per share
amounts)
 

Group share of interest expense, net

     1,400       333  

Group share of other items

     2,895       726  
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 370,838     $ 133,645  
  

 

 

   

 

 

 

Reconciliation from net income to adjusted net income

    

Net income attributable to Dole plc

   $ 80,053     $ 52,677  

Amortization of intangible assets

     11,548       2,775  

Acquisition related costs

     19,420       7,164  

Net unrealized (gain) loss on derivative instruments

     (11,296     463  

Net unrealized (gain) loss on foreign denominated intercompany borrowings

     15,218       (5,858

Net non-cash settled realized loss on foreign intercompany borrowings

     4,908        

Fair value movements on contingent consideration

     519       41  

Impairment of property, plant and equipment

     1,210        

Asset write-downs, net of insurance proceeds

     1,428       (9,880

Restructuring charges

     1,304        

(Gain) on asset sales

     (7,547      

(Gain) on acquisition or disposal of business

     (14,790     (1,539

Legal matters

           15,000  

COVID-19

     10,877        

Refinancing charges and other debt related costs

     19,663        

Tax on items above

     (7,771     (4,919

Noncontrolling interest impact of intangible asset amortization (net of tax)

     (3,544     (258

Items in earnings for equity method investments

    

Group share of amortization of acquisition related intangible assets (net of tax)

     2,518       604  
  

 

 

   

 

 

 

Adjusted net income, attributable to Dole plc

   $ 123,718     $ 56,270  
  

 

 

   

 

 

 

Adjusted net income per ordinary share—Basic

   $ 1.3289     $ 0.6044  

Adjusted net income per ordinary share—Diluted

   $ 1.3289     $ 0.6044  

Weighted average shares outstanding—Basic

     93,099       93,099  

Weighted average shares outstanding—Diluted

     93,099       93,099  

 


 

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    Total Produce plc  
    Fiscal Year Ended     Quarter Ended  
    December 31,
2020
    December 31,
2019
    December 31,
2018
    March 31,
2021
    March 31,
2020
 
   

(U.S. Dollars in thousands, except per share amount)

 

CONSOLIDATED STATEMENT OF OPERATIONS (period ended)

         

Revenue

  $ 4,345,939     $ 4,166,799     $ 4,392,593     $ 1,051,139     $ 983,777  

Cost of sales

    (4,012,348     (3,864,313     (4,067,180     (966,638     (911,460
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    333,591       302,486       325,413       84,501       72,317  

Selling, general and administrative expenses

    (264,844     (252,679     (256,227     (66,383     (65,218

Impairment loss of goodwill

                (9,811            

Impairment loss of property, plant and equipment

    (1,210                        

(Loss) gain on disposal of farming investment

          (749     17,355              

Restructuring expense

          (1,280     (5,764            

Dole transaction costs

                      (6,777      

Gain on disposal of subsidiary

                      1,539        

Foreign currency gain from share placing

                14,771              
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    67,537       47,778       85,737       12,880       7,099  

Other (expense) income, net

    (515     3,943       1,057       (73     (612

Interest income

    2,604       3,077       4,364       417       603  

Interest expense

    (10,523     (12,042     (13,829     (2,252     (2,656
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes and income from investments accounted for under the equity method

    59,103       42,756       77,329       10,972       4,434  

Income tax expense (benefit)

    (18,130     (10,312     (19,854     (1,256     345  

Equity in net earnings of investments accounted for under the equity method

    30,279       36,943       363       16,399       5,699  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    71,252       69,387       57,838       26,115       10,478  

Less: Net income attributable to non-controlling interests

    (18,764     (14,327     (21,224     (4,806     (2,147
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Total Produce plc

  $ 52,488     $ 55,060     $ 36,614     $ 21,309     $ 8,331  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share—Basic

  $ 0.1351     $ 0.1417     $ 0.0959     $ 0.0548     $ 0.0214  

Earnings per share—Diluted

  $ 0.1349     $ 0.1414     $ 0.0956     $ 0.0547     $ 0.0214  

Income from continuing operations excluding net income attributable to non-controlling interests

    52,488       55,060       36,614       21,309       8,331  

Net income attributable to Total Produce plc

  $ 52,488     $ 55,060     $ 36,614     $ 21,309     $ 8,331  

CONSOLIDATED BALANCE SHEET DATA (at period end)

         

Cash and cash equivalents

  $ 160,503     $ 129,577       $ 358,350    

Current assets

    730,395       677,550         948,630    

Total assets

    1,885,802       1,759,855         2,101,171    

Total secured debt, net

    6,289       3,838         10,042    

Current liabilities, less current portion of debt

    669,158       579,721         644,001    

Long-term debt, net

    314,840       282,208         556,611    

Total liabilities and equity

    1,885,802       1,759,855         2,101,171    

Total equity

    657,915       613,993         664,462    

CONSOLIDATED CASH FLOW AND OTHER DATA

         

Cash paid for capital expenditures

  $ (23,202   $ (26,971   $ (35,721     (8,669     (5,970

Cash paid for interest on borrowings

    (10,859     (10,682     (11,098     (1,148     (2,278

Cash flow provided by (used in) operating activities

    144,573       75,249       65,672       (37,679     (45,312

Cash flow (used in) investing activities

    (25,596     (41,984     (328,764     (9,118     (3,320

Cash flow provided by (used in) financing activities

    (100,584     (19,812     269,711       247,850       47,295  

NON-GAAP INFORMATION:

         

Reconciliation from net income to adjusted EBITDA

         

Net income

    71,252       69,387       57,838       26,115       10,478  

 

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    Total Produce plc  
    Fiscal Year Ended     Quarter Ended  
    December 31,
2020
    December 31,
2019
    December 31,
2018
    March 31,
2021
    March 31,
2020
 
   

(U.S. Dollars in thousands)

 

Interest expense, net

    7,919       8,965       9,465       1,835       2,053  

Income tax expense (benefit)

    18,130       10,312       19,854       1,256       (345
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT

    97,301       88,664       87,157       29,206       12,186  

Depreciation and amortization

    36,182       34,409       34,023       9,480       8,919  

Litigation and transaction related costs

    396       198       4,197       6,777       235  

Net unrealized loss (gain) on derivative financial instruments

    633       13       (428     219       102  

Fair value movements on contingent consideration

    519       (228     (2,551     41       136  

Goodwill impairment

                9,811              

Impairment of property, plant and equipment

    1,210                          

Loss (gain) on disposal of farming investment

          749       (17,355            

Restructuring charges

          1,280       5,764              

Foreign currency gain from share placing

                (14,771            

(Gain) on disposal of subsidiary

                      (1,539      

Items in earnings for equity method investments

         

Group share of depreciation

    45,135       40,601       19,553       11,582       10,023  

Group share of income tax expense

    22,329       16,531       2,760       15,675       7,715  

Group share of interest expense, net

    34,631       37,808       18,022       7,257       11,770  

Group share of other items

    10,602       7,604       5,561       39       4,291  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 248,938     $ 227,629     $ 151,743     $ 78,737     $ 55,377  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    DFC Holdings, LLC  
    Fiscal Year Ended     Quarter Ended  
    December 31,
2020
    December 28,
2019
    December 29,
2018
    March 31,
2021
    March 31,
2020
 
   

(U.S. Dollars in thousands)

 

CONSOLIDATED STATEMENT OF OPERATIONS (period ended)

         

Revenue

  $ 4,671,999     $ 4,515,955     $ 4,566,808     $ 1,232,675     $ 1,207,991  

Cost of sales

    (4,311,275     (4,174,298     (4,270,198     (1,096,241     (1,104,571
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    360,724       341,657       296,610       136,434       103,420  

Selling, marketing and general and administrative expenses

    (200,582     (208,884     (239,313     (64,522     (50,119

Merger transaction and other related costs

    (661     (24     (1,645     (387      

Gain on asset sales

    11,181       23,366       13,766       3,582       864  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    170,662       156,115       69,418       75,107       54,165  

Other income (expense), net

    (29,305     (3,316     (7,341     5,014       (2,883

Interest income

    3,131       4,784       4,377       691       1,079  

Interest expense

    (78,250     (89,180     (85,102     (16,631     (26,922
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity earnings (loss)

    66,238       68,403       (18,648     64,181       25,439  

Income tax (expense) benefit

    (23,782     (24,036     10,280       (20,775     (10,499

Earnings (loss) from equity method investments

    2,149       (532     (1,263     252       6  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations, net of income taxes

    44,605       43,835       (9,631     43,658       14,946  

Income (loss) from discontinued operations, net of income taxes

    (43     (2,500     (3,935           (43
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    44,562       41,335       (13,566     43,658       14,903  

Less: Net income attributable to non-controlling interests

    (1,854     (1,971     (1,832     (740     (721
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Dole Food Company, Inc.

  $ 42,708     $ 39,364     $ (15,398   $ 42,918     $ 14,182  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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    DFC Holdings, LLC  
    Fiscal Year Ended     Quarter Ended  
    December 31,
2020
    December 28,
2019
    December 29,
2018
    March 31,
2021
    March 31,
2020
 
   

(U.S. Dollars in thousands)

 

Income (loss) from continuing operations excluding net income attributable to non-controlling
interests

    42,751       41,864       (11,463     42,918       14,225  

Net income (loss) attributable to Dole Food Company, Inc.

  $ 42,708     $ 39,364     $ (15,398   $ 42,918     $ 14,182  

CONSOLIDATED BALANCE SHEET DATA (at
period end)

         

Cash and cash equivalents

  $ 66,795     $ 64,914       $ 48,623    

Current assets

    855,758       844,203         922,065    

Total assets

    2,956,513       2,949,261         3,000,427    

Notes payable and current portion of long-term debt, net

    75,504       53,958         82,547    

Current liabilities, less current portion of debt

    731,999       678,113         724,573    

Long-term debt, net

    1,230,552       1,317,799         1,235,877    

Total liabilities and equity

    2,956,513       2,949,261         3,000,427    

Total equity

    390,342       335,598         436,822    

CONSOLIDATED CASH FLOW AND OTHER DATA

         

Cash paid for capital expenditures

  $ (90,604   $ (84,189   $ (74,696   $ (40,713   $ (17,106

Interest payments on borrowings

    (74,956     (83,412     (73,854     12,245       13,993  

Cash flow provided by (used in) operating activities

    151,114       72,274       (31,958     (4,401     (7,928

Cash flow provided by (used in) investing activities

    (63,762     (14,904     12,982       (26,582     (16,653

Cash flow provided by (used in) financing activities

    (88,104     (53,059     (49,255     13,661       34,935  

NON-GAAP INFORMATION:

         

Reconciliation from net income to adjusted EBITDA

         

Net income (loss)

  $ 44,562     $ 41,335     $ (13,566   $ 43,658     $ 14,903  

Loss from discontinued operations, net of income taxes

    43       2,500       3,935             43  

Interest expense from continuing operations

    78,250       89,180       85,102       16,631       26,922  

Income tax expense (benefit) from continuing operations

    23,782       24,036       (10,280     20,775       10,499  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT before discontinued operations

    146,637       157,051       65,191       81,064       52,367  

Depreciation and amortization

    91,392       88,111       89,612       22,738       23,066  

Net unrealized (gain) loss on derivative instruments

    (11,929     11,843       (5,996     244       13,277  

Net unrealized (gain) loss on foreign currency denominated intercompany borrowings

    15,218       7,275       (10,978     (5,859     (7,368

Net non-cash settled realized (gain) loss on foreign intercompany borrowing

    4,908       (11,584                  

Restructuring charges

    1,304       2,247       16,927              

(Gain) on asset sales

    (12,137     (23,096     (13,766           (186

Vegetable recalls and related costs

          4,186       8,674              

Refinancing charges and other debt related costs

                5,459              

Litigation and transaction costs

    661       1,728       37,415          

Legal matters

                      15,000        

Asset write-downs, net of insurance proceeds

    1,428       3,037             (9,880      

Merger, transaction and other related costs

                      387        

COVID-19

    10,877                          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 248,359     $ 240,798     $ 192,538     $ 103,694     $ 81,156  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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RISK FACTORS

An investment in our ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with the other information set forth in this prospectus before investing in our ordinary shares. If any of the following risks or uncertainties actually occurs, our business, financial position and results of operations could be materially and adversely affected. In such case, the trading price of our ordinary shares could decline and you may lose all or part of your investment. Our business, financial condition, prospects, results of operations or cash flows could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. We cannot assure you that any of the events discussed in the risk factors below will not occur.

Risks Related to Our Business and Industry

Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.

Fresh produce is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are quite common but difficult to predict, the effects of which may be influenced and intensified by ongoing global climate change. Unfavorable growing conditions can reduce both crop size and crop quality. This risk is particularly acute with respect to regions or countries from which we source a significant percentage of our products. In extreme cases, entire harvests may be lost in some geographic areas. In addition, weather patterns may affect consumer demand, creating shortages in key products. For example, we experience an increased demand for salads during summer months and prolonged warm weather may stress our ability to meet such demand. Conversely, extended bouts of cold or other inclement weather may depress such demand, leading to wasted product. Adverse weather may also impact our supply chains, preventing us from procuring supplies necessary to the running of our operations and delivering our products to our customers. Outsized weather events and natural disasters may prolong or worsen such impacts. For example, we were recently adversely impacted by hurricanes in Honduras and unseasonably significant rainfall in Chile. Such adverse conditions can increase costs, decrease revenue and lead to additional charges to earnings, which may have an adverse effect on our business, financial condition and results of operations.

Fresh produce is also vulnerable to crop disease and to pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied, climatic conditions and the risks associated with ongoing global climate change. For example, black sigatoka is a fungal disease that affects banana cultivation in most areas where they are grown commercially.

Tropical Race 4 (“TR4”) may impose significant costs and losses on our business.

We have begun seeing instances of Banana Fusarium Wilt Tropical Race 4 (“TR4”), a serious vascular crop disease that affects bananas in some areas where we source product. TR4 significantly reduces productivity of banana crops and destroys affected banana plants. In the 1950’s, a predecessor disease to TR4, Banana Fusarium Wilt Tropical Race 1 (“TR1”), resulted in the banana industry discontinuing cultivation of the Gros Michel banana, which is susceptible to TR1, and moving to the Cavendish variety. While TR4 is a significant threat to the Cavendish banana, other options currently exist and are being developed. For example, a TR4-tolerant banana variety has been identified and is currently being used in Asia and Australia where TR4 has been present for many years. It is approximately 15-20% less productive than the Cavendish, however, making production costs higher.

 

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Although we are yet to experience any material impacts to our growing or sourcing operations, we continuously monitor TR4 and make improvements to our existing biosecurity and other prevention strategies. For example, we are conducting site-specific TR4 prevention activities throughout Latin America in coordination with local authorities and international experts to contain and prevent spread based on a risk-based mitigation plan. We have also developed contingency plans should TR4 at some point impact our operations, including the potential deployment of conventionally bred, gene-edited, or genetically modified (“GMO”) banana plants more resistant or immune to the disease. These prevention and research efforts have cost us approximately $6.7 million to date, and we expect to spend an additional approximately $5.3 million in 2021 and $7.2 million in 2022. Future costs are uncertain and will depend on the extent of any continued spread of the disease. For more information about gene-edited and GMO banana plants, see “—Risks Related to Our Business and Industry—Some of the ingredients that we use in our products contain GMOs and we may in the future need to develop and market GMO products and products containing GMO ingredients based on adverse market conditions.”

We may be unable to prevent TR4’s spread or develop bananas fully resistant to the disease, causing increased costs, decreased revenue and charges to earnings, which may have an adverse effect on our business, financial condition and results of operations. Efforts to develop a fully resistant plant may not succeed and if those efforts do succeed, fruit from fully resistant plants may not be marketable due to consumer preference or government regulation.

Our business is highly competitive and we cannot assure you that we will maintain our current market share.

We face strong competition from many companies in all of our product lines. Our principal competitors in the international banana business are Chiquita Brands International, Fresh Del Monte Produce and Fyffes. The international pineapple and diversified fruit categories have a large number of exporters, importers, and cooperatives competing in the sector. Our primary competitor in pineapples is Fresh Del Monte Produce and our primary competitors in the diversified fruit category are the South African company Core Fruit, the Chilean company Frusan and the multinational Unifrutti. In fresh vegetables, a limited number of grower-shippers in the United States and Mexico supply a significant portion of the U.S. market, with numerous smaller independent distributors also competing. We also face competition from grower cooperatives. In Value Added Salads, our primary competitors include Chiquita Brands International (which markets Fresh Express), Ready Pac Produce and Taylor Fresh Foods. In fresh-packed vegetables, our primary competitors include Tanimura & Antle, Duda Farm Fresh Foods, Ocean Mist Farms and the Nunes Company. In berries, our primary competitors include Driscoll Strawberry Associates, Naturipe Farms, California Giant Berry Farms, and Well-Pict Berries.

Some of our most significant competitive risks include the following:

 

   

some of our competitors may have greater operating flexibility and, in certain cases, this may permit them to respond better or more quickly to changes in the industry or to introduce new products and packaging more quickly and with greater marketing support;

 

   

several of our product lines compete with products sourced from other regions, private label products and other alternatives;

 

   

bidding for contracts or arrangements with retail and food service customers is highly competitive, and the prices or other terms of our contract bids may not be sufficient to retain existing business or to maintain current levels of profitability;

 

   

existing customers may demand changes in terms of trading which would impact our cash flow and/or profitability;

 

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we cannot predict the pricing or promotional actions of our competitors or whether those actions will have a negative effect on us; and

 

   

global economic conditions or trade disruptions may influence the behavior of our competitors in a manner, which may have a negative effect on us.

There can be no assurance that we will continue to compete effectively with our present and future competitors.

Global capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our suppliers and customers.

We depend in part on stable, liquid and well-functioning capital and credit markets to fund our operations. Although we believe that our operating cash flows, access to capital and credit markets and credit facility will permit us to meet our financing needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the capital and credit markets will not impair our liquidity or increase our costs of borrowing. Our business, financial condition and results of operations could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital and credit markets.

Our earnings are sensitive to fluctuations in market prices and demand for our products.

Excess supply often causes severe price competition in our businesses. Growing conditions in various parts of the world, particularly weather conditions such as windstorms, fires, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product.

Although the perishability of fresh produce varies to a certain degree by item (for example, bananas will typically keep fresh in temperature controlled storage for longer than lettuce), fresh produce is, as a general matter, highly perishable and must be brought to market and sold soon after harvest. The selling price received for each type of produce depends on all of these factors, including the availability and quality of the produce item in the market, and the availability and quality of competing types of produce.

In addition, general public perceptions regarding the quality, safety or health risks associated with particular food products could reduce demand and prices for some of our products. To the extent that consumer preferences evolve away from products that we produce for health or other reasons, and we are unable to modify our products or to develop products that satisfy new consumer preferences, there will be a decreased demand for our products. However, even if market prices are unfavorable, produce items which are ready to be, or have been, harvested must be brought to market promptly. A decrease in the selling price received for our products due to the factors described above could have an adverse effect on our business, financial condition and results of operations.

Currency exchange fluctuations may impact the results of our operations.

We grow, source, import, package market and distribute over 300 products that are sourced, grown, processed, marketed and distributed in over 30 countries. Our international sales are usually transacted in U.S. dollars and European currencies. Our results of operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations. Although we enter into foreign currency exchange forward contracts from time to time to reduce our risk related to currency exchange fluctuation, our results of operations may still be impacted by foreign currency exchange rates, primarily, the euro-to-U.S. dollar, Swedish krona-to-U.S. dollar and Chilean peso-to-U.S. dollar

 

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exchange rates. For example, if the U.S. dollar exchange rates in 2020, had remained unchanged from the 2019 rates, the Total Produce and Dole Food Company revenues would have been lower by approximately $25 million and $14.1 million respectively. In recent years, the euro-to-U.S. dollar exchange rate has been subject to substantial volatility which may continue, particularly in light of recent political events regarding the European Union, or EU, including the United Kingdom’s exit from the EU. We estimate that a 10% strengthening of the U.S. dollar relative to Dole Food Company’s foreign currency exposure would lower pro forma revenue by approximately $86.0 million, excluding the impact of foreign currency exchange hedges. The impact of the U.S. dollar strengthening by 10% relative to Euro, Swedish Krona and Pound Sterling would lower the revenue of Total Produce by approximately $243.0 million, excluding the impact of foreign currency exchange hedges. Because we do not hedge against all of our foreign currency exposure, our business will continue to be susceptible to foreign currency fluctuations. For more information see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company—Key Factors and Trends Affecting Our Results of Operations—Foreign Currency Fluctuations.”

Increases in commodity or raw product costs, such as fuel and paper, or changes to their availability, could adversely affect our operating results.

Increased costs for purchased fruit and vegetables have in the past negatively impacted our operating results, and there can be no assurance that they will not adversely affect our business, financial condition and results of operations in the future.

In addition, the price and availability of various commodities can significantly affect our costs. For example, the price of bunker fuel used in shipping operations, including fuel used in ships that we own or charter, is an important variable component of transportation costs. In addition, fuel and transportation costs are a significant component of the price of much of the produce that we purchase from third parties, and there can be no assurance that we will be able to pass on the increased costs we incur in these respects to customers.

The cost and availability of paper is also significant to us because some of our products are packed in cardboard boxes for shipment. If the price of paper increases, and we are not able to effectively pass these price increases along to our customers, then our operating income will decrease. Similarly, if the availability of paper is affected by increased global demand, our operations could be negatively impacted Increased costs for paper have in the past negatively impacted our operating results, and there can be no assurance that these increased costs will not adversely affect our business, financial condition and results of operations in the future.

We are subject to the risk of product contamination and product liability claims.

The sale of food products for human consumption involves the risk of injury to consumers. Such injuries may result from tampering by unauthorized third parties, quality issues such as product contamination or spoilage, including the presence of foreign objects, substances, chemicals or other agents or residues introduced during the growing, storage, processing, handling or transportation phases. We have been from time to time involved in product liability lawsuits and cannot be sure that consumption of our products will not cause a health-related illness in the future, that we will not be subject to claims or lawsuits relating to such matters or that we will not need to initiate recalls of our products in response to the foregoing. We have in the past from time to time initiated recalls, including Class I recalls, for possible contamination of produce with allergens or bacteria, such as Salmonella, E. coli and Listeria. For example, Dole Food Company experienced a Listeria outbreak in early 2016 linked to packaged salads produced at a Dole Food Company facility in Ohio, which Dole Food Company responded to by immediately ceasing all production at such facility and issuing a voluntary withdrawal and recall of packaged salads produced there. Even if a product liability claim is

 

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unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. We cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage.

Adverse perception, events or rumors relating to our brand could negatively impact our business.

Consumer and institutional recognition of the Total Produce and Dole Food Company trademarks and related brands, and the association of these brands with high-quality and safe food products, are an integral part of our business. The occurrence of any events or rumors that cause consumers and/or institutions to no longer associate these brands with high-quality and safe food products may materially adversely affect the value of our brand names and demand for our products. We have licensed and will continue to license the Total Produce and DOLE brand name to several affiliated and unaffiliated companies for use in the United States and abroad. In addition, we sold the use of the DOLE brand in Asia, Australia and New Zealand for fresh fruit, worldwide for shelf stable packaged food products, and worldwide for juice products. Acts or omissions by these companies, over which we have limited or no control, may also have such adverse effects.

In addition, sustainability credentials are an increasingly important factor in stakeholders’ perceptions of a company. Should we not meet the expectations of our stakeholders or communicate our work in this area sufficiently this may negatively impact our reputation.

We may be unable to service our substantial debt with our current or expected cash flows and such debt may limit our flexibility and ability to pursue additional financing.

As of March 31, 2021, after giving effect to the Transaction and the consummation of debt financing in connection with the Transaction, we would have had $1,920.0 million of outstanding indebtedness. Following the completion of this offering and after giving further effect to the consummation of debt financing in connection with the Transaction, and our planned use of a portion of the net proceeds to be received by us from this offering to repay outstanding debt, as described under “Use of Proceeds”, we would have had $1,398.0 million of outstanding indebtedness and $235 million available for borrowing under the Revolving Credit Facility, as of March 31, 2021. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control, including those described in this “Risk Factors” section and elsewhere in this prospectus. Our business may not generate sufficient cash flow from operations to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional financing on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. For more information on our outstanding indebtedness, see “Description of Certain Indebtedness.”

Our earnings are subject to seasonal variability.

Our earnings may be affected by seasonal factors, including:

 

   

the seasonality of our supplies and consumer demand;

 

   

the ability to process products during critical harvest periods; and

 

   

the timing and effects of ripening and perishability.

 

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As an example, although banana production tends to be relatively stable throughout the year, banana pricing is seasonal because bananas compete against other fresh fruit that generally comes to market beginning in the summer. As a result, banana prices are typically higher during the first half of the year.

We expect to expand our business, in part, through future acquisitions, but we may not be able to identify or complete suitable acquisitions, which could harm our business, financial condition and results of operations.

Our business strategy includes growth through the acquisitions of other businesses. We continually review, evaluate and consider potential acquisitions. In such evaluations, we are required to make difficult judgments regarding the value of business opportunities and the related risks and cost of potential liabilities. We plan to use acquisitions of companies to expand our geographic coverage, add experienced management and increase our product offerings. We may not be able to continue to identify attractive acquisition opportunities or successfully acquire identified targets. In addition, we may not be successful in integrating our current or future acquisitions, including integrations in connection with the Transaction, into our existing operations, which may result in unforeseen operational difficulties or diminished financial performance or require a disproportionate amount of our management’s attention. Even if we are successful in integrating our current or future acquisitions into our existing operations, we may not derive the benefits, such as operational or administrative synergies, that we expected from such acquisitions, which may result in the investment of our capital resources without realizing the expected returns on such investment. Furthermore, competition for acquisition opportunities may increase our cost of making further acquisitions or cause us to refrain from making additional acquisitions. We also may be limited in our ability to incur additional indebtedness in connection with or to fund future acquisitions under the Credit Agreement (as defined below). In addition, although we have dedicated in-house personnel whose primary role is to focus on acquisitions, the time and effort involved in attempting to identify acquisition candidates and consummate acquisitions may divert members of our management from the operations of our company.

We depend on certain key customers and are subject to risks if such key customers reduce the amount of products they purchase from us or terminate their relationships with us.

In certain regions our customer base is concentrated among a small number of large, key customers. Overall our top ten customers accounted for approximately 30% of pro forma revenue for fiscal year 2020, although no one customer accounted for more than 10% of combined revenue. If we fail to maintain our relationships with such customers and such customers terminate their relationship or otherwise reduce the amount of products they purchase from us below our expectations, we could suffer adverse effects in such reason on our business, business opportunities, results of operations, financial condition and cash flows.

We typically extend credit to our key customers. Failure to collect, trade receivables, untimely collection or customer defaults could adversely affect our liquidity.

We extend credit to certain of our key customers and, as of December 31, 2020, on a pro forma basis, we would have had $741.0 million in trade receivables outstanding. Generally, our customers will pay within the credit period, however, customer illiquidity may cause repayment to fall outside the credit period or not at all. We perform ongoing credit evaluations of our customers’ financial condition and manage the risk based on experience, customers’ track record and historic default rates. If we encounter future problems collecting amounts due from our customers, particularly customers with a large amount of credit outstanding, or if we experience delays or customer default in the collection of amounts due, our liquidity could be adversely affected.

 

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Public health outbreaks, epidemics or pandemics, including the global COVID-19 pandemic, have disrupted and may continue to disrupt, our business and could materially affect our business, financial condition and results of operations.

The recent COVID-19 pandemic and resulting worldwide economic conditions have affected, and may continue to affect, our business, financial condition and results of operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. For example, government imposed mandatory closures and restrictions across various key global markets of ours resulted in volatile supply and demand conditions, primarily due to reduced demand in the foodservice distribution channel. As a result, product was redirected to the retail channel and in some cases this led to an increased supply and lower pricing. This primarily impacted our pineapple and fresh-packed vegetable products. While demand in our retail channels for certain products has increased due to the impact of COVID-19 and this has somewhat compensated for losses in other channels and for other products, there is no guarantee that this increased demand will continue. While these effects were pronounced to varying degrees throughout fiscal year 2020, the future extent of the impact of the COVID-19 pandemic on our financial performance, including our ability to execute our strategic initiatives, is still uncertain and will depend on future developments, including the duration and spread of the pandemic, related government restrictions and the success of vaccines and other treatments for COVID-19. Additionally, as the global economic impacts of COVID-19 continue, fluctuate and/or change, the pandemic’s impact on our operating results may change or be prolonged.

In addition, our ability to continue to supply our products is highly dependent on our workforce, including our workers involved in the growing, harvesting, transportation, processing and distribution of our products. Our ability to maintain the safety of our workforce may be significantly impacted by individuals contracting or being exposed to COVID-19, and our operations and financial results may be negatively affected as a result. While we are following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce, we cannot be certain that these measures will be successful in ensuring the health of our workforce. For example, as a result of a significant number of positive test results at one of our salad processing plants, our workforce was significantly depleted for approximately one week, resulting in inefficiencies and higher production and product transportation costs. Additional workforce disruptions of this nature may significantly impact our ability to maintain our operations and may adversely affect our financial results. Throughout the pandemic governments have restricted travel between countries and transportation generally, and this has impacted the movement of our goods across international borders. While these restrictions have not significantly impacted our ability to supply our products to date, there is no guarantee that future border closures or restrictions will not have a significant impact on our business. We also incurred costs in relation to safety precautions undertaken in our shipping operations and the stockpiling of certain commodities, and although such costs have since subsided, there can be no assurances that we would not be required to incur such costs or similar costs in the future.

The impact of the COVID-19 pandemic on our operating results can also impact our ability to meet our financial obligations. Our operating results have been and may continue to be impacted by the pandemic, and we cannot predict whether future developments associated with the COVID-19 pandemic will materially adversely affect our long-term liquidity position. In the event of a continued sustained market deterioration or further delayed recovery, we may need additional liquidity which would require us to evaluate available alternative strategies such as selling assets, restructuring or refinancing our indebtedness, or seeking additional equity capital, strategies of which could be unsuccessful.

 

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We are subject to costs and liabilities under foreign and domestic environmental laws and regulations.

Compliance with environmental laws, including those related to the handling, use, generation, transport, and disposal of hazardous materials is inherent in major agricultural operations, including those conducted by us. Compliance with these foreign and domestic laws and related regulations is an ongoing process, and these laws and regulations are frequently revised and generally become stricter over time. Failure to comply with applicable laws and regulations can result in requirements to cease noncompliant operations, incurrence of additional capital or operating expenses to correct violations, or the assessment of significant fines and penalties. While we believe that we are generally in material compliance with applicable laws and regulations, there can be no assurance that the cost of compliance with environmental laws and regulations will not, in the future, have a material effect on our capital expenditures, earnings or competitive position. It is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, including those driven by concerns about climate change and further restrictions on the use of agricultural chemicals, could result in increased compliance costs which may be material.

Environmental laws include those that impose liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other potentially hazardous substances or environmental contamination of our current and previously owned or leased property.

We use herbicides, pesticides and other potentially hazardous substances in the operation of our business. We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.

We may be subject to liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other potentially hazardous substances or environmental contamination of our current and previously owned or leased property.

We use herbicides, pesticides and other potentially hazardous substances in the operation of our business. We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.

Certain environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act in the United States, impose strict and, in many cases, joint and several, liability for the cost of remediating contamination, on current and former owners of property or on persons responsible for causing such contamination. Dole Food Company has been in the past involved in remedial investigations and actions at some locations, and we could in the future be required to spend significant sums to remediate contamination that has been caused by us, our predecessors, or prior owners or operators of our properties. An adverse result in any potential future matter could have an adverse effect on our business, financial condition and results of operations.

We face risks related to our former use of the pesticide DBCP.

Dole Food Company formerly used DBCP, a nematicide that was used on a variety of crops throughout the world. The registration for DBCP with the U.S. government was cancelled, with limited

 

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exceptions, in 1979 based in part on an apparent link to male sterility among chemical factory workers who produced DBCP. There are a number of pending lawsuits in the United States and other countries against the manufacturers of DBCP and certain growers, including Dole Food Company, who used DBCP in the past. The cost to defend or settle these lawsuits, and the costs to pay any judgments or settlements resulting from these lawsuits, or other lawsuits which might be brought, could have an adverse effect on our business, financial condition or results of operations. For more information, see “Business—Legal Proceedings.”

Goodwill and other intangible assets are subject to the risk of future impairments which could adversely impact our operating results.

We review goodwill and other intangible assets for impairment on an annual basis or earlier if indicators for impairment are present. The goodwill associated with our acquisitions are sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. If these businesses do not perform to expected levels, the goodwill may be at risk for impairment in the future.

The fair value of the Dole Food Company trade names and trademarks are sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. If our products do not perform to expected levels, the trade names and trademarks associated with these products may also be at risk for impairment in the future.

Any such impairment charges could be material and have an adverse impact on our business, financial condition and results of operations.

Changes in immigration laws could impact the availability of labor to harvest our products and operate our salad manufacturing plants, or the availability of produce purchased from third party suppliers.

The personnel engaged for our U.S. harvesting operations typically include significant numbers of immigrants who are authorized to work in the United States. Immigrants who are authorized to work in the United States also make up a portion of the workforce at our U.S. salad manufacturing plants. The availability and number of these workers could decrease if there are changes in U.S. immigration laws. A scarcity of available personnel to harvest agricultural products in the United States could increase our labor costs, increase our product costs or lead to product shortages, and adversely impacting our business, financial condition and results of operations.

A portion of our workforce is unionized and labor disruptions could decrease our profitability.

As of December 31, 2020, approximately 30% of our full-time employees worldwide worked under various collective bargaining agreements and unionized workforces. We cannot give assurance that we will be able to negotiate these or other collective bargaining agreements on the same or more favorable terms as the current agreements, or at all, and without production interruptions, including labor stoppages. A prolonged labor dispute, which could include a work stoppage, could have an adverse effect on the portion of our business affected by the dispute, which could adversely impact our business, financial condition and results of operations.

We are subject to risks relating to our information systems.

Our electronic information and our information system assets may be made unavailable, leaked or altered due to a computer cybersecurity incident, which could adversely affect the results of our operations, and we cannot predict the extent or duration of these incidents.

 

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Although our computer systems are distributed in many geographic areas and Dole Food Company and Total Produce maintain largely independent information technology systems, there are some intra-company systems which are connected together in a private network. A widespread computer cybersecurity incident, such as virus infection, may significantly disrupt our operations and business processes. In such a case, we may have to operate manually, which may result in significant delay in the delivery of our products to our customers or damage to the fresh fruit and vegetable products. Our customers could refuse to continue to do business with us and prematurely terminate or reduce existing contracts, resulting in a significant reduction of our operating revenue.

We have intellectual property, trade secrets and confidential business information that are stored in electronic formats that could be leaked to competitors or the public due to computer cybersecurity incidents, which may result in loss of competitive position and market share. We also have personal confidential information stored in our controlled systems. This information, if stolen or leaked, could result in significant financial and legal risk including penalties under data protection legislation, such as the General Data Protection Regulation in the EU.

In the context of our EU-facing operations, we may be subject to specific compliance obligations under the General Data Protection Regulation (EU) 2016/679 (the “GDPR”) and associated laws and regulations in different EU Member States in which we operate. In addition, portions of our business established outside the EU may be required to comply with the requirements of the GDPR and associated EU legislation with respect to the offering of products to, or the monitoring of, individuals in the EU. We may also be subject to the local privacy and data protection laws of the EU Member States in which we offer products. Failure to comply with these EU data protection and privacy laws, can carry penalties and potential criminal sanctions, as well as the risk of litigation. In addition, Directive 2002/58/EC (as amended by Directive 2009/136/EC) (together, the “e-Privacy Directive”) governs, among other things, the use of cookies and the sending of electronic direct marketing within the EU and, as such, will apply to our marketing activities within the EU. Following Brexit, the UK has adopted its own data protection and direct marketing laws (the “UK data protection laws”) which are currently based on the corresponding EU legislation. Our UK-facing operations may therefore be subject to specific compliance obligations under the UK data protection laws.

We may be targeted by computer hackers from the internet, from business partners’ networks connected to our network or from employees, for specific purposes such as financial gain, political or ideological motives or simply to damage our reputation, which may result in significant decline in consumer preference for our products in certain geographic regions or globally, and could potentially reduce our market share.

Recovery from any of the above computer incidents could be expensive. Rapidly raising and maintaining higher standards of computer cybersecurity practices in our business globally may require significant initial investment and higher operating costs, and therefore could negatively impact our operating income.

We are increasingly dependent on information technology, and expanding social media vehicles present new risks.

The inappropriate use of certain media vehicles could cause brand damage or information leakage. Negative posts or comments about us or our products on any social networking web site could seriously damage our reputation. In addition, the disclosure of non-public company sensitive information through external media channels could lead to information loss. Identifying new points of entry as social media continues to expand presents new challenges. Any business interruptions or damage to our reputation could negatively impact our business, financial condition and results of operations.

 

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Certain of our defined benefit pension plans are currently underfunded, and we may have to make significant cash payments to the plans, which would reduce the cash available for our business.

We have underfunded obligations under certain of our benefit plans. As of December 31, 2020, the liabilities under Dole Food Company’s benefit plans exceeded the assets of such benefit plans by approximately $132.2 million, and the liabilities under Total Produce’s benefit plans exceeded the assets of such benefit plans by approximately $21.3 million. As a result, on a pro forma basis, as of December 31, 2020, the liabilities under our benefit plans would have exceeded the assets of those benefit plans by approximately $153.5 million. The funded status of our benefit plans is dependent upon many factors, including returns on invested assets, actuarial assumptions, including the level of certain market interest rates and the discount rate used to determine pension obligations. Unfavorable returns on the plan assets, or unfavorable changes in applicable laws or regulations, could materially change the timing and amount of required plan funding, which would reduce the cash available for our business. In addition, a decrease in the discount rate used to determine pension obligations could result in an increase in the valuation of our benefit plans obligations, which could affect the reported funding status of our benefit plans and future contributions, as well as the periodic pension cost in subsequent fiscal years. ERISA, along with certain provisions of the Code (as defined below), require minimum funding contributions to our U.S. defined benefit pension plan.

The Pension Benefit Guaranty Corporation (the “PBGC”) has the authority to petition a court to terminate an underfunded tax-qualified pension plan under limited circumstances. In the event our U.S. tax-qualified defined benefit pension plan is terminated by the PBGC, we could be liable to the PBGC for the entire amount of the underfunding, as calculated by the PBGC based on its own assumptions, which might result in a larger obligation than that based on the assumptions we have used to fund such plan.

The European defined benefit plans are also subject to local regulators such as the Irish Pensions Authority and UK’s Pension Regulator. Total Produce has three European defined benefit plans (two in Ireland and one in the Netherlands), two UK defined benefit plans and one in Canada. Each of these is subject to local funding requirements and the powers of local regulators such as the Irish Pensions Authority, the UK’s Pension Regulator and the Dutch Central Bank (De Nederlandse Bank) in the Netherlands. The UK’s Pension Regulator has the power in certain circumstances to impose a debt or contribution demand on an employer to the extent that a defined benefit scheme is underfunded. There is currently no legislation in Ireland or the Netherlands equivalent to that in the UK.

Indebtedness under our Credit Agreement bears interest based on the London Interbank Offered Rate (“LIBOR”), which may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.

The ICE Benchmark Administration, the administrator of LIBOR, announced on March 5, 2021 that it intends to cease publication of LIBOR rates (i) with respect to U.S. dollar LIBOR with interest periods of 1 week and 2 months, after December 31, 2021 and (ii) with respect to U.S. dollar LIBOR with all other interest periods, after June 30, 2023, and as a result, methods of calculating LIBOR are evolving. If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form, we may need to renegotiate the terms of our Credit Agreement to replace LIBOR with the new standard that is established, if any, or to otherwise agree with the agent under such facilities on a new means of calculating interest. At this time we cannot reasonably estimate the expected impact on our business of the discontinuation of LIBOR.

 

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We face other risks in connection with our international operations.

Our operations are heavily dependent upon products grown, purchased and sold internationally. In addition, our operations significantly contribute to the economies of many of the countries in which we operate, increasing our visibility and susceptibility to legal or regulatory changes. These activities are subject to risks that are inherent in operating in foreign countries, including the following:

 

   

foreign countries could change laws and regulations, or impose currency restrictions and other restraints;

 

   

the risk that the government may expropriate assets;

 

   

the potential imposition or implementation of burdensome tariffs, quotas or customs clearance processes;

 

   

political changes and economic crises may lead to changes in the business environment in which we operate;

 

   

conflict within a country in which we operate or international conflict, including terrorist acts, could significantly impact our business, financial condition and results of operations;

 

   

economic sanctions may be imposed on some countries, which could disrupt the markets for products we sell, even if we do not sell into the target country;

 

   

the suspension of imports of one or more products we sell, which could disrupt the markets for those products in other countries;

 

   

dependency on leases and other agreements;

 

   

global competitive, economic, industry, market, political and regulatory conditions, including economic downturns, political instability and war or civil disturbances that may disrupt production and distribution logistics or limit sales in individual territories;

 

   

trade wars between nations in which we do business; and

 

   

the difficulty in adhering to various anti-corruption laws and regulations.

Additionally, as a company with international operations, we are subject to economic and trade sanctions laws and regulations in the jurisdictions in which we do business, including, as applicable, the United States, the United Kingdom, and the European Union, among others. These laws and regulations may have a broad jurisdictional reach. For instance, our non-U.S. affiliates may be required to comply with the sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), depending on the sanctions program involved or the nexus of the non-U.S. affiliate’s activities to the United States. Economic sanctions typically prohibit or impose restrictions on dealings that involve certain foreign jurisdictions, governments, individuals or entities. Moreover, the goods we sell may be subject to applicable export control laws and regulations, such as the Export Administration Regulations (“EAR”) administered by the U.S. Department of Commerce’s Bureau of Industry and Security. The EAR generally govern the export, reexport, and in-country transfer of items that are subject to the EAR, including U.S.-origin goods. Changes to applicable sanctions or export control laws and regulations could result in decreased use of our products, or hinder our ability to export or sell our products to existing or potential customers, which may adversely affect our operating results, financial condition or strategic objectives. If we fail to comply with these laws and regulations, we could be subject to substantial civil or criminal penalties.

Dole Food Company has previously engaged in the exportation of agricultural commodities to distributors located in Iran and in other countries for onward shipment to Iran in reliance on an OFAC general license that authorizes such activities. This general license required Dole Food Company to comply with certain conditions with respect to products sold, end-user limitations and payment terms. Although Dole Food Company believes it complied with the general license requirements, there can be no assurance that Dole Food Company would be deemed by OFAC to have been in compliance.

 

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Non-compliance with the general license could lead to a finding of a violation, which may result in monetary penalties, reputational harm or other harm to our business. In January 2020, due to difficulties in receiving payment and importing the agricultural commodities into Iran following the reimposition of U.S. sanctions against Iran that had been lifted under the Joint Comprehensive Plan of Action, Dole Food Company ceased all direct exports of agricultural commodities to Iran and all exports to other countries for the purpose of onward distribution to Iranian consignees or end users.

Terrorism and the uncertainty of war may have an adverse effect on our operating results.

Terrorist attacks and other acts of violence or war in the United States, the EU or in other countries may affect the markets in which we operate and our operations and profitability. From time to time in the past, our operations or personnel have been the targets of terrorist or criminal attacks, and the risk of such attacks impacts our operations and results in increased security costs. Further terrorist attacks outside the United States against the United States or operators of businesses with significant presence or history in the United States may occur, or hostilities could develop based on the current international situation. The potential near-term and long-term effect these attacks may have on our business operations, our customers, the markets for our products, the U.S. economy and the economies of other places in which we source or sell our products is uncertain. The consequences of any terrorist attacks, or any armed conflicts, are unpredictable, and we may not be able to foresee events that could have an adverse effect on our markets or our business.

Our operations and products are highly regulated in the areas of food safety and protection of human health and the environment.

Our operations are subject to a broad range of foreign, federal, state and local environmental, health and safety laws and regulations, including laws and regulations governing the use and disposal of pesticides and other chemicals, all of which involve compliance costs. These regulations directly affect day-to-day operations and, to maintain compliance with all of the laws and regulations that apply to our operations, we have been and may be required in the future to modify our operations, purchase new equipment or make capital improvements. Changes to our processes and procedures could require us to incur unanticipated costs and/or materially impact our business. Violations of these laws and regulations can result in substantial fines, penalties or sanctions. In some circumstances, we may recall a product, voluntarily or otherwise, if we or the regulators believe it presents a potential risk. There can be no assurance that these modifications and improvements and any fines, penalties and recalls would not have an adverse effect on our business, financial condition and results of operations. In addition, we have been and in the future may become subject to lawsuits alleging that our operations and products caused personal injury or property damage.

As a producer and distributor of food products, we are subject to the laws and regulations in the jurisdictions where our facilities are located and where our products are distributed. In particular, we are subject to the Federal Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act (“FSMA”), which is enforced by the FDA. The FDA has the authority to regulate the growing, harvesting manufacture, including composition and ingredients, processing, labeling, packaging import, distribution and marketing and safety of food in the United States. The FSMA, enacted in January 2011, significantly enhances the FDA’s authority over various aspects of food regulation. For example, the FSMA granted the FDA mandatory recall authority when the FDA determines there is a reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals. The FDA has been active in implementing the requirements of the FSMA through issuance of regulations designed to result in a reduction of the risk of contamination in food manufacturing and in beginning compliance enforcement of those regulations, such as the Foreign Supplier Verification program, and the full impact of the FDA’s compliance protocols is not yet known, and we cannot assure you that it will not materially impact our business. Regulatory agencies in other jurisdictions

 

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have similar authority to address the risk of contamination or adulteration, and to require that contaminated products be removed from the market.

Within the European Union, food safety policy is governed by the Farm to Fork Strategy which regulates food safety at all stages of the production and distribution process for all food products marketed within the EU, whether produced within the EU or imported from third countries. This body of legislation forms a complex and integrated system of rules covering the entire food chain, from animal feed and health, through plant protection and food production, to processing, storage, transport, import and export and retail sales. A framework regulation called the General Food Law Regulation (EC No. 178/2002) lays down the general principles and requirements of food law. European Member States are required to implement European food safety law at national level. National authorities and food agencies are responsible for enforcement and ensuring compliance within European Member States. National authorities may withdraw or recall food from the market if it is considered to be injurious to health or unfit for human consumption. Where food presents a serious risk to human health, animal health, or the environment, the European Commission can put in place protective measures and suspend the placing on the market or use of products originating from the EU or suspend imports of products originating from non-EU countries.

The European Green Deal sets out to make Europe the first climate-neutral continent by 2050. The EU’s Farm to Fork Strategy is an integral part of the Green Deal and aims to address the challenges of sustainable food systems. The shift to a sustainable food system could result in increased compliance costs associated with compliance with new laws and regulations.

The failure to comply with these laws and regulations in any jurisdiction, or to obtain required approvals, could result in fines, as well as a ban or temporary suspension on the production of our products or limit or bar their distribution, and affect our development of new products, and thus could materially adversely affect our business and operating results. In addition, the United States Department of Agriculture (the “USDA”) regulates the import and export of certain fruits and vegetables into and from the United States, and the USDA also imposes growing, manufacturing and certification requirements for certain products labeled with organic claims. Similarly, the EU maintains a system of control, certification and enforcement to guarantee that food which is marketed as organic complies with organic standards. Organic food imported into the EU is also subject to control procedures to guarantee that they have been produced and shipped in accordance with organic principles. Failure to obtain necessary permits or otherwise comply with USDA and European regulations and requirements could result in a ban or temporary suspension of the import or export of our products into or from the United States, or our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business. The Canadian Food Inspection Agency, and other Canadian governmental departments, could enforce laws such as the Safe Food for Canadians Regulations in such a way as to cause significant disruption to our Canadian business, including for example requirements relating to import licenses, traceability, organic certification, and food testing requirements.

We are subject to transportation risks.

An extended interruption in our ability to ship our products could have an adverse effect on our business, financial condition and results of operations. Similarly, any extended disruption in the distribution of our products could have an adverse effect on our business, financial condition and results of operations. We rely on third-party shipping companies to move some of our products overseas, third-party stevedores to load and unload our products at our port locations, and third-party trucking companies to transport our products to and from our port locations, and these third parties are therefore a source of transportation risk. While we believe we are adequately insured and would attempt to transport our products by alternative means if we were to experience an interruption due to a strike, natural disaster or otherwise, we cannot be sure that we would be able to do so, or be successful in doing so, in a timely and cost-effective manner.

 

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Some of the ingredients that we use in our products contain GMOs and we may in the future need to develop and market GMO products and products containing GMO ingredients based on adverse market conditions.

Some of the ingredients that we use in our products may contain GMOs in varying proportions. The use of GMOs in food has been met with varying degrees of acceptance in the territories in which we operate. Some of such territories, including the United States, have approved the use of GMOs in food products, and GMO and non-GMO products in such territories are produced together and frequently commingled. Regulations will or may be passed that require labeling of any food with GMO ingredients, such as a regulation that is planned to go into effect in 2022 in the United States. Such labeling requirements may impact the public perception of products containing such labels. Elsewhere, adverse publicity about genetically modified food has led to governmental regulation limiting sales of GMO products in some of the territories in which we operate, including the EU. It is possible that new restrictions on GMO products will be imposed in major territories for some of our products or that our customers will decide to purchase fewer GMO products or not buy GMO products at all, which could adversely affect our business, financial condition and results of operations.

In addition to the GMO ingredients that we currently deploy, we are researching gene-edited products and GMO products and may deploy and market these products in the future based on market demand and need. The success of such deployment will in large part depend on the market acceptance of these products in the areas that we operate. In the future, we may be forced to utilize gene-edited or GMO products in response to adverse market conditions, including disease, climate change or rising costs, if such products are the only viable alternatives. For example, as a result of TR4 spreading into new growing regions, we may need to deploy gene-edited or GMO bananas resistant to the disease to maintain a viable supply of bananas to our key markets. If adverse public opinion about gene-edited or GMO products predominates, we may be unable to sell such products in certain of our key markets, adversely affecting our business, financial condition and results of operations. For more information about TR4, see “—Risks Related to Our Business and Industry—Tropical Race 4 (“TR4”) may impose significant costs and losses on our business.”

Our future results of operations may be adversely affected by the availability of organic and non-GMO products and ingredients.

Our ability to ensure a continuing supply of organic and non-GMO products and ingredients at competitive prices depends on many factors beyond our control, such as the number and size of farms that grow organic and non-GMO crops, climate conditions, changes in national and world economic conditions, currency fluctuations and forecasting adequate need of seasonal products and ingredients.

The organic and non-GMO ingredients that we use in the production of our products, including, among others, fruits, vegetables, nuts and grains, are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, water scarcity, temperature extremes, frosts, earthquakes and pestilences. Natural disasters and adverse weather conditions, including the potential effects of climate change, can lower crop yields and reduce crop size and crop quality, which in turn could reduce our supplies of, or increase the prices of, organic or non-GMO ingredients. If our supplies of organic or non-GMO ingredients are reduced, we may not be able to find enough supplemental supply sources on favorable terms, if at all, which could impact our ability to supply product to our customers and adversely affect our business, financial condition and results of operations.

An interruption at one or more of our manufacturing facilities could negatively affect our business, and our business continuity plan may prove inadequate.

We own or lease, manage and operate a number of manufacturing, processing, packaging, storage and office facilities. We could be rendered unable to accept and fulfill customer orders as a

 

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result of disasters, pandemics, including COVID-19, business interruptions or other similar events. Some of our inventory and manufacturing facilities are located in areas that are susceptible to harsh weather, and the production of certain of our products is concentrated in a few geographic areas. In addition, we store chemicals used in our business, and our storage of these chemicals could lead to risk of leaks, explosions or other events. Although we have business continuity plans, we cannot provide assurance that our business continuity plan will address all of the issues we may encounter in the event of a disaster or other unanticipated issue. Our business interruption insurance may not adequately compensate us for losses that may occur from any of the foregoing. In the event that a natural disaster, or other catastrophic event, were to destroy any part of any of our facilities, or interrupt our operations for any extended period of time, or if harsh weather or epidemics prevent us from delivering products in a timely manner, our business, financial condition and results of operations could be materially and adversely affected. In addition, if we fail to maintain our labor force at one or more of our facilities, we could experience delays in production or delivery of our products, which could also have an adverse effect on our business, financial condition and results of operations.

If we lose the services of our key management, our business could suffer.

We depend to a significant extent on the continued service of our key executives, and our continued growth depends on our ability to identify, recruit and retain key management personnel. We are also dependent on our ability to continue to attract, retain and motivate our personnel. We do not typically carry key person life insurance on our executive officers. If we lose the services of our key management or fail to identify, recruit and retain key personnel, our business, financial condition or results of operations may be materially and adversely impacted.

Climate change laws could have an impact on our financial condition and results of operations.

Legislative and regulatory authorities in the United States, the EU, Canada and other jurisdictions internationally will likely continue to consider numerous measures related to climate change and greenhouse gas emissions. In order to produce, manufacture and distribute our products, we and our suppliers, use fuels, electricity and various other inputs that result in the release of greenhouse gas emissions. Concerns about the environmental impacts of greenhouse gas emissions and global climate change may result in environmental taxes, charges, regulatory schemes or assessments or penalties, which could restrict or negatively impact our operations, as well as those of our suppliers, who would likely pass all or a portion of their costs along to us. We may not be able to pass any resulting cost increases along to our customers. Any enactment of laws or passage of regulations regarding greenhouse gas emissions or other climate change laws by the United States, the EU, Canada or any other international jurisdiction where we conduct business, could materially and adversely affect our business, financial condition and results of operations.

We are dependent on our relationships with key suppliers to obtain a number of our products.

We depend on key suppliers to obtain a number of our products with our top ten suppliers accounting for 18% of our total supplies in fiscal year 2020. Termination of our relationship with our key suppliers could adversely affect our business, financial condition and results of operations. Additionally, we may enter into seasonal purchase agreements committing us to purchase fixed quantities of produce at fixed prices. We may suffer losses arising from the inability to sell these committed quantities and/ or achieve the committed price. We also provide grower loans to suppliers with various levels of security and we may suffer losses if these loans are not repaid. Any of these factors could materially and adversely affect our business, financial condition and results of operations.

Technological innovation by our competitors could make our food products less competitive.

Our competitors include other fresh fruit and vegetable producers and major food ingredient and consumer-packaged food companies that also engage in the development and sale of food and food

 

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ingredients. Many of these companies are engaged in the development of new plant varieties, food ingredients and other food products and frequently introduce new products into the market. Existing products or products under development by our competitors could prove to be more effective, more resistant to disease or less costly than our products, which could have an adverse effect on the competitiveness of our products and adversely affect our business, financial condition and results of operations.

We rely on protection of our intellectual property and proprietary rights.

Our success depends in part on our ability to protect our intellectual property rights. We rely primarily on patent, copyright, trademark and trade secret laws to protect our proprietary technologies. Our policy is to protect our technology by, among other things, filing patent applications for technology relating to the development of our business in the United States, the EU and in selected foreign jurisdictions. Our trademarks and brand names are registered in jurisdictions throughout the world. We intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs. We also rely on trade secrets and proprietary know-how and confidentiality agreements to protect certain of the technologies and processes that we use. The failure of any patents, trademarks, trade secrets or other intellectual property rights to provide protection to our technologies would make it easier for our competitors to offer similar products, which could adversely affect our business, financial conditions and results of operations.

Our operations are influenced by agricultural policies.

We are affected by governmental agricultural policies such as price supports and acreage set aside programs, and these types of policies may affect our business. The production levels, markets and prices of the grains and other raw products that we use in our business are materially affected by government programs that include acreage control and price support programs, including policies of the U.S. Department of Agriculture, the EU’s Common Agricultural Policy and similar programs in other jurisdictions. Changes in these and other comparable programs could have an adverse effect on our business, financial condition and results of our operations.

Litigation and regulatory enforcement concerning marketing and labeling of food products could adversely affect our business and reputation.

The marketing and labeling of any food product in recent years has brought increased risk that consumers will bring class action lawsuits, and that the Federal Trade Commission, or FTC, and/or state attorneys general will bring legal action concerning the truth and accuracy of the marketing and labeling of the product. Examples of causes of action that may be asserted in a consumer class action lawsuit include fraud, unfair trade practices and breach of state consumer protection statutes, such as Proposition 65 in California. FTC and/or state attorneys general may bring legal action that seeks removal of a product from the marketplace and impose fines and penalties. Even when not merited, class claims, action by the FTC or state attorneys general enforcement actions can be expensive to defend and adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which could have a material and adverse effect on our business, financial condition or results of operations. The labeling of our products, and their distribution and marketing, is also subject to regulation by governmental authorities in each jurisdiction where our products are marketed, such as, in the EU, under Council Regulation (EC) No 834/2007 on organic production and labelling of organic products and under Directive (EU) 2019/2161 on consumer protection rules, Regulation (EU) No 1169/2011 on the provision of food information to consumers and Regulation (EC) No 1924/2006 on nutrition and health claims made on foods. For example, the USDA requires compliance with certain growing production and certification requirements as a condition to labeling foods with the word “organic” or with the USDA organic seal. A failure to comply with such

 

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labeling requirements could result in enforcement proceedings in the relevant jurisdiction that could materially affect our marketing and distribution.

We are the subject of a number of legal proceedings, investigations and inquiries that could have an adverse effect on our reputation, business, financial condition and results of operations, and could result in additional claims.

We have been or are currently the subject of a number of legal proceedings and civil and criminal investigations and inquiries by governmental agencies, including matters related to DBCP use in the past, product safety and health, product recalls, environmental property damage (such as proceedings related to a housing development in the City of Carson, California) and tax disputes. See Note 17 “Commitments and Contingencies” to the consolidated financial statements of DFC Holdings for additional information regarding matters related to DBCP use and proceedings related to a housing development in the City of Carson, California. See also “Risk Factors—Risks Related to Our Business and Industry—We face risks related to our former use of the pesticide DBCP.” We are unable to predict how long such proceedings, investigations and inquiries will continue or the full scope of such investigations, but we anticipate that we will continue to incur significant costs in connection with these matters and that these proceedings, investigations and inquiries will result in a substantial distraction of management’s time, regardless of the outcome. These proceedings, investigations and inquiries may result in damages, fines, penalties, consent orders or other administrative action against us and/or certain of our officers, or in changes to our business practices, and any such fines or penalties could be greater than we currently anticipate. Furthermore, publicity surrounding these proceedings, investigations and inquiries or any enforcement action as a result thereof, even if ultimately resolved favorably for us could result in additional investigations and legal proceedings. As a result, these proceedings, investigations and inquiries could have an adverse effect on our reputation, business, financial condition and results of operations.

Tax matters, including changes in tax rates, disagreements with taxing authorities and imposition of new taxes could impact our results of operations and financial condition.

We are subject to taxes in Ireland, the United States and numerous other jurisdictions where the Company’s subsidiaries are organized. Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change. Our future effective tax rate could be affected by changes in our mix of earnings in countries with differing statutory tax rates, changes in valuation of our deferred tax assets and liabilities, or changes in tax laws or their interpretation, including possible U.S. tax reform and contemplated changes in other countries of long-standing tax principles. These and other similar changes, if finalized and adopted, could have a material impact on our income tax expense and deferred tax balances.

We are also subject to regular reviews, examinations and audits by the Internal Revenue Service and other taxing authorities with respect to taxes inside and outside of the United States. Although we believe our tax estimates are reasonable, if a taxing authority disagrees with the positions we have taken, we could face additional tax liability, including interest and penalties. There can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material impact on our results of business, financial condition and results of operations.

We also need to comply with new, evolving or revised tax laws and regulations. The enactment of or increases in tariffs, including value added tax, or other changes in the application of existing taxes, in markets in which we are currently active, or may be active in the future, or on specific products that we sell or with which our products compete, may have an adverse effect on our business or on our results of operations.

The exit by the United Kingdom from the EU could adversely affect us.

The United Kingdom formally exited the EU (“Brexit”) on December 31, 2020, however the future terms of the United Kingdom’s relationship with the EU remain uncertain. Such uncertainty was

 

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diminished on December 24, 2020, as the United Kingdom and the EU reached agreement in principle on the terms of the EU-U.K. Trade and Cooperation Agreement (the “EU-U.K. Agreement”), which became provisionally applicable on January 1, 2021 and covers economic and security co-operation between the two, has a single overarching governance framework, and covers a wide range of topics, including trade in goods and in services. The scope of the EU-U.K. Agreement is narrower than the pre-Brexit trade framework, and the effects of Brexit will depend in part on any further agreements the United Kingdom makes to retain access to the EU or to compensate elsewhere with agreements with other global markets. Accordingly, Brexit could adversely affect United Kingdom and European market conditions, could contribute to instability in some global financial and foreign exchange markets, including continued volatility in the value of the GBP, require the United Kingdom to establish or renegotiate trade relationships with other countries or otherwise adversely affect trading agreements or similar cross-border cooperation arrangements (whether economic, tax, legal, regulatory or otherwise) beyond the date of December 31, 2020.

Given the perishable nature of food products and the inevitable delays incurred as a result of Brexit in transporting food around the EU and into and out of the U.K., food and agricultural products may have a reduced shelf life which could adversely affect our business.

The long-term effects of Brexit are still uncertain, including the permanent policy framework to be put in place following the EU-U.K. Agreement. Any change in economic, trade or tariff policy could adversely affect our business, business opportunities, results of operations, financial condition and cash flows.

We are subject to the FCPA and other anti-corruption laws or trade control laws, as well as other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our business, financial condition and results of operations.

We are subject to anti-corruption laws, including the Foreign Corrupt Practices Act (“FCPA”), Irish anti-corruption laws including the Criminal Justice (Corruption Offences) Act 2018, Proceeds of Crime Acts 1996 – 2016, the Criminal Justice (Theft and Fraud Offences) Act 2001 and other anti-corruption laws that apply in countries where we do business. The FCPA, UK Bribery Act and these other laws generally prohibit us and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We operate in a number of jurisdictions, some of which may pose a high risk of potential FCPA violations, and we participate in joint ventures and relationships with third parties whose actions could potentially subject us to liability under the FCPA or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

We are subject to anti-trust laws such as EU competition law. Failure to comply with such regulations could adversely impact our reputation, business and results of operations. It could also result in material fines for the Company.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security, the U.S. Department of Treasury’s Office of Foreign Asset Control, and various non-U.S. government entities, including applicable export control regulations, economic sanctions on countries and persons, customs requirements, currency exchange regulations and transfer pricing regulations, or collectively, “Trade Control laws.”

There is no assurance that we will be completely effective in ensuring our compliance with all applicable anticorruption laws, including the FCPA or other legal requirements, including Trade Control

 

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laws. If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the FCPA other anti-corruption laws or Trade Control laws by United States or foreign authorities could also have an adverse impact on our reputation, business, financial condition and results of operations.

Risks Related to the Transaction

Optimizing our operations may be more difficult, costly or time-consuming than expected and the anticipated benefits and cost savings of the Transaction may not be realized.

Historically, Total Produce and Dole Food Company operated independently. Immediately prior to the completion of this offering, we expect to complete the Transaction and will begin the process of integrating these companies into Dole plc.

The future success of the Transaction, including the anticipated benefits and cost savings, depends, in part, on our ability to optimize our operations. The optimization of our operations following the completion of the Transaction will be a complex, costly and time-consuming process and if we experience difficulties in this process, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period. In addition, there is no guarantee that once such process has been completed we will operate in a manner that is more efficient, organized, effective and competitive as a whole than Dole Food Company and Total Produce operated as separate companies prior to the Transaction that we will be successful or realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the Transaction.

Specifically, the following issues, among others, must be addressed in combining Total Produce’s and Dole Food Company’s operations:

 

   

combining the companies’ corporate functions;

 

   

managing geographically separated organizations, systems and facilities;

 

   

complying with additional regulatory and other legal, accounting and financial requirements;

 

   

addressing financial and other impacts to our business resulting from fluctuations in currency exchange rates and unit economics across multiple jurisdictions;

 

   

enforcing intellectual property rights internationally;

 

   

general economic and political conditions;

 

   

integrating Total Produce’s and Dole Food Company’s accounting and finance processes, including different fiscal year end dates and methods of accounting;

 

   

combining Total Produce’s and Dole Food Company’s businesses in a manner that positions us to achieve the operational synergies anticipated to result from the Transaction, the failure of which would result in the anticipated benefits of the Transaction not being realized in the time frame currently anticipated or at all;

 

   

maintaining existing agreements with customers, distributors, suppliers and growers and avoiding delays in entering into new agreements with prospective customers, distributors, suppliers and growers;

 

   

determining whether and how to address possible differences in corporate cultures and management philosophies;

 

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integrating the companies’ administrative and information technology infrastructure;

 

   

developing products and technology that allow value to be unlocked in the future;

 

   

evaluating and forecasting the financial impact of the Transaction, including accounting charges; and

 

   

effecting potential actions that may be required in connection with obtaining regulatory approvals.

In addition, at times the attention of certain members of our management and resources may be focused on integration of the businesses of Total Produce and Dole Food Company and diverted from day-to-day business operations, which may disrupt our ongoing business and the business of the combined company.

We are also incurring costs related to the optimization of our operations, including facilities and systems consolidation costs and employment-related costs, such as maintaining employee morale and retaining key employees. We continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the optimization of our operations.

The operational synergies attributable to the Transaction may vary from expectations.

Although we do not anticipate fully integrating the divisions of Total Produce and Dole Food Company and, as a result, do not expect material organizational synergies between our businesses, we do anticipate achieving material operational synergies as we combine the companies, such as supply chain and production related synergies. We may, however, fail to realize the anticipated benefits and expected operational synergies from the Transaction, which could adversely affect our business, financial condition or results of operations. The success of the Transaction will depend, in significant part, on our ability to successfully manage the business of Total Produce and Dole Food Company, grow the revenue of the combined company and realize the anticipated strategic benefits and expected operational synergies from the Transaction. The integration process, to the extent the two businesses are to be integrated, could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the Transaction and could harm our financial performance.

We believe that the combination of Total Produce and Dole Food Company will benefit from the advantages of supply chain and production synergies. However, the anticipated benefits of the Transaction may not be realized fully or at all or may take longer to realize than expected. Actual operating, production, supply chain, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Transaction within the anticipated timing or at all, our business, financial condition, results of operations and prospects may be materially adversely affected.

We have incurred significant transaction costs and may incur integration costs in connection with the Transaction.

We have incurred, and expect to continue to incur, significant costs in connection with the Transaction. The substantial majority of these costs will be non-recurring expenses and are reflected in the unaudited pro forma condensed combined financial information included in this prospectus. We

 

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may incur additional costs as a result of any integration of the Total Produce and Dole Food Company businesses, and we may not achieve synergies and other benefits sufficient to offset the incremental costs of the Transaction.

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and our actual financial condition and results of operations following completion of the Transaction may differ materially.

The unaudited pro forma consolidated financial statements contained in this prospectus are presented for illustrative purposes only; may not be an accurate indication of what results of operations would have been had the Transaction been completed on the dates assumed; are based on various adjustments, assumptions and preliminary estimates; and may not be an indication of our financial condition or results of operations for several reasons. Our actual financial condition and results of operations following the completion of the integration of the businesses may not be consistent with, or evident from, these unaudited pro forma consolidated financial statements. In addition, the assumptions used in preparing the unaudited pro forma consolidated financial statements may not be realized, and other factors may affect our financial condition or results of operations. The pro forma financial information has been derived from the audited historical financial statements of Total Produce and Dole Food Company, and certain adjustments and assumptions have been made regarding Total Produce and Dole Food Company on a pro forma basis. The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

Any potential decline in our financial condition or results of operations may cause significant variations in the unaudited pro forma consolidated financial statements and the price of our ordinary shares.

Risks Related to this Offering and Our Ordinary Shares

An active trading market for our ordinary shares may never develop or be sustained.

Prior to this offering, there has been no public market for the combined company’s ordinary shares, though Total Produce’s securities were publicly traded on the Euronext Growth Dublin and AIM London Stock Exchange. Although our ordinary shares have been approved for listing on the NYSE, an active trading market for our ordinary shares may not develop on that exchange or elsewhere or, if developed, that market may not be sustained. Accordingly, if an active trading market for our ordinary shares does not develop or is not maintained, the liquidity of our ordinary shares, your ability to sell your ordinary shares when desired and the prices that you may obtain for your ordinary shares will be adversely affected. An inactive trading market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

The market price and trading volume of our ordinary shares may be volatile, which could result in rapid and substantial losses for our shareholders.

Even if an active trading market develops, the market price of our ordinary shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our ordinary shares may fluctuate and cause significant price variations to occur. The initial public offering price of our ordinary shares will be determined by negotiation between us and the representative of the underwriters based on a number of factors and may not be indicative of prices that will prevail in the open market following the completion of this offering. If the market price of our ordinary shares declines

 

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significantly, you may be unable to resell your shares at or above your purchase price, if at all. The market price of our ordinary shares may fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our ordinary shares include:

 

   

variations in our quarterly operating results or our operating results failing to meet the expectations of securities analysts or investors in a particular period;

 

   

changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts;

 

   

the contents of published research reports about us or our industry or the failure of securities analysts to cover our ordinary shares after this offering;

 

   

additions to, or departures of, key management personnel;

 

   

any increased indebtedness we may incur in the future;

 

   

actions by institutional shareholders;

 

   

litigation and governmental investigations;

 

   

operating and stock performance of other companies that investors deem comparable to us (and changes in their market valuations) and overall performance of the equity markets;

 

   

speculation or reports by the press or investment community with respect to us or our industry in general;

 

   

increases in market interest rates that may lead purchasers of our shares to demand a higher yield;

 

   

announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments;

 

   

volatility or economic downturns in the markets in which we, our distributors and our customers are located caused by pandemics, including the COVID-19 pandemic, and related policies and restrictions undertaken to contain the spread of such pandemics or potential pandemics; and

 

   

general market, political and economic conditions, including any such conditions and local conditions in the markets in which any of our customers are located.

These broad market and industry factors may decrease the market price of our ordinary shares, regardless of our actual operating performance. The stock market in general has from time to time experienced extreme price and volume fluctuations, including in recent months. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Future offerings of debt or equity securities by us may materially adversely affect the market price of our ordinary shares.

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional ordinary shares or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity or shares of preferred shares. We may also seek to expand operations in the future to other markets which we would expect to finance through a combination of additional issuances of equity, corporate indebtedness and/or cash from operations.

 

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Issuing additional ordinary shares or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing shareholders or reduce the market price of our ordinary shares or both. Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our ordinary shares. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our ordinary shares. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings.

Holders of our ordinary shares bear the risk that our future offerings may reduce the market price of our ordinary shares and/or dilute their shareholdings in us.

The market price of our ordinary shares could be negatively affected by sales of substantial amounts of our ordinary shares in the public markets by the TP Holders and the C&C Parties.

After this offering, there will be 93,098,644 ordinary shares outstanding (or 96,848,644 ordinary shares outstanding if the underwriters exercise their option to purchase additional ordinary shares in full). Of our issued and outstanding shares, the 25,000,000 ordinary shares sold in this offering (or 28,750,000 ordinary shares if the underwriters exercise the option to purchase additional ordinary shares in full) and all of the ordinary shares held by the TP Holders will be freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 (“Rule 144”) under the Securities Act.

Upon the completion of this offering the TP Holders and the C&C Parties, respectively, will beneficially own approximately 60.3% and 12.8% of our ordinary shares, respectively (or approximately 58.0% and 12.3%, of our ordinary shares, if the underwriters exercise their option to purchase additional ordinary shares in full), which can be resold into the public markets in the future in accordance with the requirements of Rule 144. Pursuant to the Registration Rights Agreement (as defined below), the C&C Parties will be entitled to certain registration rights with respect to the resale of their ordinary shares. The sale by the C&C Parties of a large number of shares after this offering, or a perception that such sales could occur, could significantly reduce the market price of our ordinary shares. We may also find it more difficult to raise additional capital by selling equity securities in the future, at a time and price that we deem appropriate as a result of such sales or perception that such sales could occur. See “Shares Eligible For Future Sale” and “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

We and our executive officers and directors (and certain connected parties thereof) and the C&C Parties will agree with the underwriters that, subject to certain exceptions, for a period of 180 days after the date of this prospectus, we and they will not directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract to purchase or otherwise dispose of any ordinary shares or any securities convertible into or exercisable or exchangeable for ordinary shares, or in any manner transfer all or a portion of the economic consequences associated with the ownership of ordinary shares, or cause a registration statement covering any ordinary shares to be filed, without the prior written consent of Goldman Sachs & Co. LLC. See “Underwriting (Conflict of Interest).”

The market price of our ordinary shares may decline when the restrictions on resale by the C&C Parties lapse. A decline in the price of our ordinary shares might impede our ability to raise capital through the issuance of additional ordinary shares or other equity securities.

See “Description of Share Capital,” and “Shares Eligible For Future Sale.”

 

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The future issuance of additional ordinary shares in connection with our incentive plans or otherwise will dilute all other shareholdings.

After this offering, assuming the underwriters exercise their option to purchase additional 3,750,000 ordinary shares in full, we will have an aggregate of 203,151,356 ordinary shares authorized but unissued and not reserved for issuance under our incentive plans. We may issue all of these ordinary shares without any action or approval by our shareholders, subject to certain exceptions. In addition, we will have ordinary shares reserved for issuance under our incentive plans subject to the limits in these plans. Any ordinary shares issued in connection with our incentive plans, the exercise of outstanding share options or otherwise would dilute the percentage ownership held by the investors who purchase ordinary shares in this offering.

Investors in this offering will suffer immediate dilution.

The initial public offering price of our ordinary shares will be higher than the as adjusted net tangible book value per share issued and outstanding immediately after this offering. Therefore, if you purchase ordinary shares in this offering, you will experience immediate dilution of $15.57 in the net tangible book value per share, based upon the initial public offering price of $16.00 per share.

If securities or industry analysts do not publish research or reports about our business or publish negative reports, our share price could decline.

The trading market for our ordinary shares will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one of more of these analysts ceases coverage of our company or fails to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrades our ordinary shares or if our reporting results do not meet their expectations, our share price could decline.

United States investors may have difficulty enforcing judgments against us, our directors and executive officers.

We are incorporated under the laws of Ireland, and our registered offices and a substantial portion of our assets are located outside of the United States. As a result, it may not be possible to effect service of process on such persons or us in the United States or to enforce judgments obtained in courts in the United States against such persons or us based on civil liability provisions of the securities laws of the United States.

There is no treaty between Ireland and the United States providing for the reciprocal enforcement of judgments obtained in the other jurisdiction and Irish common law rules govern the process by which a U.S. judgment may be enforced in Ireland. The following requirements must be met as a precondition before a U.S. judgment will be eligible for enforcement in Ireland:

 

   

the judgment must be for a definite sum;

 

   

the judgment must be final and conclusive, and the decree must be final and enforceable in the court which pronounces it;

 

   

the judgment must be provided by a court of competent jurisdiction, and the procedural rules of the court giving the foreign judgment must have been observed;

 

   

the U.S. court must have had jurisdiction in relation to the particular defendant according to Irish conflict of law rules; and

 

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jurisdiction must be obtained by the Irish courts over judgment debtors in enforcement proceedings by service in Ireland or outside Ireland in accordance with the applicable court rules in Ireland.

Even if the above requirements have been met, an Irish court may exercise its right to refuse to enforce the U.S. judgment if the Irish court is satisfied that the judgment (1) was obtained by fraud; (2) is in contravention of Irish public policy; (3) is in breach of natural or constitutional justice; or (4) is irreconcilable with an earlier judgment. By way of example, a judgment of a U.S. court of liabilities predicated upon U.S. federal securities laws may not be enforced by Irish courts on the grounds of public policy if that U.S. judgment includes an award of punitive damages. Further, an Irish court may stay proceedings if concurrent proceedings are being brought elsewhere.

Our Articles of Association contain exclusive forum provisions for certain claims, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Articles of Association provide that unless we consent in writing to the selection of another forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our decision to adopt the Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While there can be no assurance that federal or state courts will follow the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision means that suits brought by our shareholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and our Articles of Association confirm that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Exchange Act. Accordingly, actions by our shareholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court.

Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. Additionally, our shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. These provisions may limit our shareholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees and agents. Alternatively, if a court were to find the choice of forum provision contained in our Articles of Association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which may have an adverse effect on our business, financial condition and results of operations.

Certain provisions of Irish law and our Articles of Association could hinder, delay or prevent a change in control of us, which could adversely affect the price of our ordinary shares.

Certain provisions of Irish law and our Articles of Association contain provisions that could make it more difficult for a third-party to acquire us without the consent of our board of directors.

 

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Our Articles of Association include provisions permitting our board of directors to issue preferred shares from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred shares, all without approval of our shareholders and allowing our board of directors to adopt a shareholder rights plan upon such terms and conditions as it deems expedient in the interests of the Company.

As an Irish public limited company, we are subject to provisions of Irish law, which may prevent or impede any attempt to acquire us including provisions relating to mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well as substantial acquisition rules and rules requiring the disclosure of interests in our shares in certain circumstances.

Our Articles of Association include provisions classifying our board of directors into three classes of directors with staggered three-year terms. A retiring director is eligible for reappointment at the annual general meeting at which he or she retires. Our Articles of Association also permit the board of directors to fill any vacancies. These factors could have the effect of making the replacement of incumbent directors more time consuming and difficult.

These provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management or our board of directors. Public shareholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to shareholders. These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our ordinary shares and your ability to realize any potential change of control premium. See “Description of Share Capital—Anti-Takeover Provisions” and “Certain Relationships and Related Party Transactions.”

We will incur increased costs as a result of operating as a U.S. public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would harm our business.

As a public company that qualifies as a foreign private issuer, we will incur significant legal, accounting, and other expenses that we did not incur prior to this offering, including costs resulting from public company reporting obligations under the Securities Act, the Exchange Act, and regulations regarding corporate governance practices. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of the NYSE, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We expect that we will need to hire additional accounting, finance, and other personnel in connection with being listed on the NYSE and our efforts to comply with the requirements of being a public company, and our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms. We are currently evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack

 

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of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all.

Pursuant to Sarbanes-Oxley Act Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 20-F with the SEC after we become a public company. In order to maintain effective internal controls, we will need additional financial personnel, systems and resources. To achieve compliance with Sarbanes-Oxley Act Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. To date, we have not conducted a review of our internal controls for the purpose of providing the reports required by these rules. During the course of our review and testing, we have in the past and may in the future, identify deficiencies and be unable to remediate them before we must provide the required reports.

Furthermore, if we identity material weakness in our internal control over financial reporting in the future, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our shares to fall. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the NYSE or other adverse consequences that would materially harm our business and reputation.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected and corrected on a timely basis. We have identified a material weakness in our internal control over financial reporting and we may identify additional material weaknesses in the future.

Historically, as a public company operating in Ireland, we were not required to comply with the internal control requirements of the Sarbanes-Oxley Act. As a U.S. public company, our management will be required to report on the effectiveness of our internal control over financial reporting beginning with our Annual Report on Form 20-F for the year ended December 31, 2022. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

 

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In the course of preparing for this offering, we and our independent registered public accounting firm identified a deficiency in our internal control over financial reporting for the years ended December 31, 2020, 2019 and 2018 that we concluded represented a material weakness. The material weakness identified related to our internal controls over the manual review of journal entry postings not being designed to an appropriate level of precision and insufficient segregation of duties over the review process. While no misstatement was identified, this material weakness could result in a material misstatement of our annual or interim financial statements that would not be prevented or detected and corrected on a timely basis.

We have initiated the process of remediating the identified material weakness and are taking steps that we believe will address the underlying cause of the identified material weakness. We have engaged financial advisors to assist us in the process. We plan to take various measures to remediate the deficiency, including and not limited to hiring additional finance and accounting personnel with appropriate Sarbanes-Oxley training, and further developing and documenting our accounting policies and financial reporting procedures. These actions that we are taking are subject to ongoing management review, as well as audit committee oversight. Neither we nor our independent registered public accounting firm have performed an assessment or audit, respectively, of our internal control over financial reporting during any period in accordance with the provisions of the Sarbanes-Oxley Act.

We expect to be a “foreign private issuer” and are permitted to follow certain home country corporate governance practices. As a foreign private issuer, we may have different disclosure and other requirements than U.S. domestic registrants. While we intend to adopt the NYSE corporate governance requirements you may not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements. We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a foreign private issuer, we are subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer, in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we may rely on exemptions from certain U.S. rules which permit us to follow Irish legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.

We follow Irish laws and regulations that are applicable to Irish companies. However, Irish laws and regulations applicable to Irish companies do not contain provisions directly comparable to the U.S. proxy rules and the U.S. rules relating to the filing of reports on Form 10-Q or 8-K. Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Irish law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company. In addition, as a “foreign private issuer” whose securities will be listed on the NYSE, the Company is permitted to follow certain home country corporate governance practices in lieu of certain requirements of the NYSE. A “foreign private issuer” must disclose in its annual

 

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reports filed with the SEC each requirement of the NYSE with which it does not comply, followed by a description of its applicable home country practice. The Company currently intends to follow the corporate governance requirements of the NYSE rather than home country practice. However, the Company cannot make any assurances that it will continue to follow such corporate governance requirements in the future, and may therefore, in the future, rely on available exemptions that would allow the Company to follow its home country practice. Unlike the requirements of the NYSE, there are currently no mandatory corporate governance requirements in Ireland that would require the Company to: (i) have a majority of the board of directors be independent; (ii) establish a nominating/governance committee; or (iii) hold regular executive sessions where only independent directors may be present. As a result of the above, our shareholders will not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.

Further, loss of our foreign private issuer status could result in significant additional cost and expense. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made on June 30, 2022. In order to maintain our current status as a foreign private issuer, either a majority of our outstanding voting securities must be directly or indirectly held of record by non-residents of the United States, or, if a majority of our outstanding voting securities are directly or indirectly held of record by residents of the United States, a majority of our executive officers or directors may not be United States citizens or residents, more than 50% of our assets cannot be located in the United States and our business must be administered principally outside the United States. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We would also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of NYSE, as described above. Further, as a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we would otherwise not incur as a foreign private issuer.

We intend to pay regular dividends on our ordinary shares, but our ability to do so may be limited.

Following the completion of this offering and subject to legally available funds, we intend to pay quarterly cash dividends on our ordinary shares, subject to the discretion of our board of directors and our compliance with applicable law, including the Irish Companies Act, and depending on our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends and other considerations that our board of directors deems relevant. Because we are a holding company and have no direct operations, we expect to pay dividends, if any, only from funds we receive from our subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. Our ability to pay dividends may also be restricted by the terms of our existing debt agreements, including the Credit Agreement, or any future debt or preferred equity securities. See “Dividend Policy.”

Our dividend policy entails certain risks and limitations, particularly with respect to our liquidity. By paying cash dividends rather than investing that cash in our business or repaying debt, we risk, among other things, slowing the pace of our growth and having insufficient cash to fund our operations or unanticipated capital expenditures or limiting our ability to incur additional borrowings.

 

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Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends. The declaration and payment of dividends will be determined at the discretion of our board of directors, acting in compliance with applicable law and contractual restrictions.

A transfer of our ordinary shares, other than by means of the transfer of book-entry interests in the Depository Trust Company (“DTC”), may be subject to Irish stamp duty.

Transfers of our ordinary shares effected by means of the transfer of book-entry interests in DTC will not be subject to Irish stamp duty. However, if you hold your ordinary shares directly rather than beneficially through DTC or your ordinary shares are transferred other than by means of the transfer of book-entry interests in DTC, any transfer of your ordinary shares could be subject to Irish stamp duty (currently at the rate of 1% of the higher of the price paid or the market value of the shares acquired). In such circumstances, while the payment of Irish stamp duty is primarily a legal obligation of the transferee, when shares are purchased on the NYSE, the purchaser will require the stamp duty to be borne by the transferor. The potential for stamp duty could adversely affect the price of your ordinary shares which are held directly outside of DTC rather than beneficially through DTC or are transferred other than by means of the transfer of book-entry interests in DTC.

In certain limited circumstances, dividends we pay may be subject to Irish dividend withholding tax.

In certain limited circumstances, Irish dividend withholding tax (currently at a rate of 25%) may arise in respect of any dividends paid on our ordinary shares. A number of exemptions from Irish dividend withholding tax exist such that shareholders resident in the United States and shareholders resident in certain countries may be entitled to exemptions from Irish dividend withholding tax.

Shareholders resident in the United States that hold their ordinary shares through DTC will not be subject to Irish dividend withholding tax provided the addresses of the beneficial owners of such ordinary shares in the records of the brokers holding such ordinary shares are recorded as being in the United States (and such brokers have further transmitted the relevant information to a qualifying intermediary appointed by us). U.S. resident shareholders in the Company that hold their ordinary shares outside of DTC and shareholders resident in certain other countries (irrespective of whether they hold their ordinary shares through DTC or outside DTC) will not be subject to Irish dividend withholding tax provided the beneficial owners of such ordinary shares have furnished completed and valid dividend withholding tax forms or an IRS Form 6166, as appropriate, to our transfer agent or their brokers (and such brokers have further transmitted the relevant information to our transfer agent). However, other shareholders may be subject to Irish dividend withholding tax, which could adversely affect the price of your ordinary shares.

Dividends received by Irish residents and certain other shareholders may be subject to Irish income tax.

Shareholders entitled to an exemption from Irish dividend withholding tax on dividends received from us will not be subject to Irish income tax in respect of those dividends, unless they have some connection with Ireland other than their shareholding in us (for example, they are resident in Ireland). Shareholders who are not resident nor ordinarily resident in Ireland but who are not entitled to an exemption from Irish dividend withholding tax will generally have no further liability to Irish income tax on those dividends which suffer Irish dividend withholding tax.

Ordinary shares received by means of a gift or inheritance could be subject to Irish capital acquisitions tax.

Irish capital acquisitions tax (“CAT”) could apply to a gift or inheritance of our ordinary shares, irrespective of the place of residence, ordinary residence or domicile of the parties. This is because our

 

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ordinary shares are regarded as property situated in Ireland. The person who receives the gift or inheritance has primary liability for CAT. Gifts and inheritances passing between spouses are exempt from CAT. Children have a tax-free threshold of 335,000 in respect of taxable gifts or inheritances received from their parents. Certain other tax-free thresholds may also apply.

There can be no assurance that we will not be a passive foreign investment company for United States federal income tax purposes for any taxable year, which could subject United States investors in our ordinary shares to significant adverse United States income tax consequences.

A non-U.S. corporation, such as our company, will be classified as a passive foreign investment company (“PFIC”) for any taxable year if either (i) at least 75% of its gross income for such year consists of certain types of “passive” income, or (ii) at least 50% of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce passive income or are held for the production of passive income. Based on the current and anticipated value of our assets and composition of our income and assets (taking into account the expected cash proceeds from, and our anticipated market capitalization following, this offering), we do not presently expect to be a PFIC for the current taxable year or the foreseeable future.

However, while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a fact-intensive determination made annually that depends, in part, upon the composition and classification of our income and assets.

If we were to be or become a PFIC for any taxable year during which a U.S. Holder (as defined in “United States Federal Income Tax Considerations”) holds our ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”

 

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DESCRIPTION OF THE TRANSACTION

The following is a summary of the Transaction and certain material terms of the Transaction Agreement (as defined below) and is qualified in its entirety by reference to the complete text of the Transaction Agreement, a copy of which is attached as Exhibit 10.9 and Exhibit 10.10 to the registration statement of which this prospectus forms a part. The following description does not purport to be complete and is qualified in its entirety by reference to the Transaction Agreement. This summary is not intended to provide you with any other factual information about Total Produce or Dole Food Company. We urge you to read carefully this entire prospectus, including the documents included and incorporated herein by reference. You should also review the section entitled “Where You Can Find Additional Information” in this of this prospectus.

Overview of the Transaction

Background

On July 31, 2018, TP USA, a wholly owned subsidiary of Total Produce, acquired 45% of the membership interests in DFC Holdings, the parent company of Dole Food Company (the “2018 Transaction”). Pursuant to the terms of the 2018 Transaction, TP USA has the right, but not the obligation, (i) to acquire, at any time and from time to time, up to an additional 6% of the membership interests in DFC Holdings (in one or more tranches of 1%) (the “Second Tranche”) and (ii) from and after July 31, 2020, to acquire the balance of the membership interests in DFC Holdings (the “Third Tranche”), in each case, on pricing and other terms agreed in the 2018 Transaction. If TP USA has not exercised its right to acquire the Third Tranche by July 31, 2023, TMG has the right to cause a process to market and sell DFC Holdings or all or substantially all of its assets on pricing and other terms agreed in the 2018 Transaction.

Transaction Agreement

On February 16, 2021, we entered into the Transaction Agreement (as amended on April 23, 2021 and from time to time thereafter) with the other Total Produce Parties, DFC Holdings and the C&C Parties, pursuant to which Total Produce has agreed to combine with DFC Holdings under the Company and, upon the terms and subject to the conditions set forth in the Transaction Agreement, complete this offering as soon as possible thereafter. Upon completion of the Transaction and this offering, the combined company will trade on the NYSE under “DOLE” and the existing Total Produce listings on the Euronext Growth Dublin and the AIM London Stock Exchange will be discontinued.

Upon the terms and subject to the conditions set forth in the Transaction Agreement, as described more fully below, the Transaction will be effected in a series of steps including the following:

 

   

pursuant to the Share Exchange, we will acquire 100% of the issued share capital of Total Produce in exchange for issuing our ordinary shares to Total Produce shareholders. We will be able to consummate the Share Exchange pursuant to a court-sanctioned scheme of arrangement under Chapter 1, Part 9 of the Irish Companies Act (the “Scheme”) which became binding on the shareholders of Total Produce on July 20, 2021;

 

   

immediately following the completion of the Share Exchange, Merger Sub will merge with and into DFC Holdings (the “Merger”), with DFC Holdings surviving the Merger, and the C&C Parties will acquire our ordinary shares; and

 

   

immediately following the completion of the Share Exchange and the Merger, we will sell our ordinary shares in this offering.

Immediately following the completion of the Transaction and prior to this offering, shareholders of Total Produce and the C&C Parties will own 82.5% and 17.5%, respectively, of our ordinary shares on a fully diluted basis.

 

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As used in this prospectus, (i) “Completion” means completion of the Share Exchange, effectiveness of the Merger and completion of this offering and (ii) “Transaction” means, collectively, the Share Exchange, the Merger and the other transactions described below in the sections entitled “—Merger and Related Transactions—Pre-Closing Unit Sales” and “—Merger and Related Transactions—Contribution” (excluding, for purposes of clarity and the avoidance of doubt, this offering).

In the event Completion does not occur for any reason, the terms of the 2018 Transaction will remain in effect, including the right of TP USA to exercise its options to acquire the Second Tranche and the Third Tranche.

Share Exchange and Scheme

We will acquire 100% of the issued share capital of Total Produce by implementing the Share Exchange. Pursuant to the Share Exchange, we will issue one (1) of our ordinary shares to each Total Produce shareholder as of the record date specified by the board of directors of Total Produce for every seven (7) Total Produce shares that are transferred to us, such that the Total Produce shareholders will collectively own 82.5% of our ordinary shares on a fully diluted basis as of immediately following the Share Exchange and the Merger and prior to this offering. Accordingly, upon completion of the Share Exchange, Total Produce will become our direct, wholly owned subsidiary.

The Scheme was approved by Total Produce shareholders at the meeting convened by order of the Irish High Court to consider and, if thought fit, approve the Scheme (the “Scheme Meeting”) held on July 17, 2021. Certain shareholder resolutions required to facilitate the implementation of the Scheme were approved by Total Produce shareholders at the extraordinary general meeting of Total Produce shareholders held immediately after the Scheme Meeting. The purpose of the Scheme and the resolutions adopted at the extraordinary general meeting was to put in place arrangements that are now legally binding on all Total Produce shareholders and which now make it possible for us to implement the Share Exchange in the manner described in this prospectus. The High Court of Ireland issued an order sanctioning the Scheme at the court hearing held on July 20, 2021. The Scheme became binding on all Total Produce shareholders when the order of the Irish High Court was filed and registered with the Registrar of Companies in Dublin on July 20, 2021. The Share Exchange can therefore be implemented because of the arrangements which were incorporated in the Scheme.

Completion of the Share Exchange will occur on a date to be specified by Total Produce after the satisfaction or waiver of the conditions set forth in the Transaction Agreement (other than those conditions that by their nature are to be satisfied at Completion, but subject to the satisfaction or waiver of those conditions at such time). For more information, see “—Other Key Provisions of the Transaction Agreement—Conditions to Completion.”

Under the terms of the Scheme, no fractional entitlements will be allotted to any Total Produce shareholder but all fractions of our ordinary shares to which a Total Produce shareholder would otherwise be entitled will be aggregated and sold in the market by the Scheme exchange agent, with any sale proceeds being donated to UNICEF.

Merger and Related Transactions

Pre-Closing Unit Sales

Immediately prior to the effective time of the Merger, the C&C Parties will sell to TP USA:

 

   

a number of Class A Units of DFC Holdings with an aggregate value of $25,000,000 (based on the value of Class A Units of DFC Holdings implied by the price per ordinary share in this

 

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offering) in exchange for a promissory note issued by TP USA in favor of TMG in a capital amount of $25,000,000 (the “TP USA Promissory Note”); and

 

   

a number of Class A Units of DFC Holdings with an aggregate value equal to the value of certain indemnification claims against the C&C Parties arising from the 2018 Transaction that remain pending as of immediately prior to Completion (based on the value of Class A Units of DFC Holdings implied by the price per ordinary share in this offering) in satisfaction of such pending claims.

We refer to these sales collectively as the “Pre-Closing Unit Sales.” For more information regarding the indemnification claims described above, see “—Other Key Provisions of the Transaction Agreement—Waiver of Certain Indemnification Claims.”

Merger

At the effective time of the Merger, by virtue of the Merger, all of the Class A Units of DFC Holdings owned by the C&C Parties immediately prior to the effective time of the Merger but after giving effect to the Pre-Closing Unit Sales will be exchanged automatically by operation of law for the right to receive a number of our ordinary shares which will result in the C&C Parties collectively owning 17.5% of our ordinary shares outstanding on a fully diluted basis as of immediately following the Share Exchange and the Merger and prior to the completion of this offering. We refer to the ordinary shares issued to the C&C Parties in the Merger as the “Consideration Shares.”

Following such exchange, each Class A Unit of DFC Holdings will be cancelled and converted into one unit of the surviving company in the Merger. Each Class B Unit of DFC Holdings will also be cancelled and converted into one unit of the surviving company in the Merger. Accordingly, at the effective time of the Merger, by virtue of the Merger, DFC Holdings will become our subsidiary, with the outstanding membership interests thereof owned by us and by TP USA.

Completion of the Merger will take place immediately following the completion of the Share Exchange.

Contribution

Immediately following the effective time of the Merger (or at such other time as the C&C Parties and Total Produce may agree in writing), we will contribute the units representing the membership interests in DFC Holdings then owned by us to Total Produce in exchange for ordinary shares of Total Produce with a fair market value equal to the fair market value of such contributed units. Thereafter, Total Produce will immediately contribute all such units to TP USA in exchange for shares of TP USA’s common stock with a fair market value equal to the fair market value of such contributed units. We refer to these transactions collectively as the “Contribution.”

As a result of the Contribution, DFC Holdings will become a direct, wholly owned subsidiary of TP USA.

Offering

Generally

Pursuant to the Transaction Agreement, Total Produce will manage this offering in consultation with a steering committee initially comprised of Rory Byrne, Jimmy Tolan, Johan Lindén and Gary Wong. The Transaction Agreement provides that other persons may be appointed to the steering committee by (i) the members of the steering committee or (ii) Total Produce upon written notice to the members of the steering committee, in each case, so long as the steering committee consists of a majority approved by Total Produce. Total Produce has the right to terminate this offering at any time in its sole discretion and the Company shall not enter into any binding commitment with the underwriters

 

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in this offering or other potential purchasers of our ordinary shares to give effect to this offering without the prior written consent of the board of directors of Total Produce. Additionally, the board of directors of Total Produce (or a duly authorized pricing committee thereof), in consultation with the underwriters in this offering, will determine (i) the offer price in this offering per ordinary share and the range therefor and (ii) the size of this offering, subject to the conditions described below in “—Other Key Provisions of the Transaction Agreement—Conditions to Completion.”

Completion of this offering will occur immediately following completion of the Share Exchange, the Merger and the Contribution, or at such other date and time as is agreed to in writing by the C&C Parties and Total Produce.

The Transaction Agreement provides that the net proceeds to us from this offering will be used to repay our and our subsidiaries’ outstanding indebtedness, the costs of the Transaction (except as otherwise provided for in the Expense Reimbursement Agreement (as defined below)) or for such other purposes as our board of directors may determine. For more information, see “Use of Proceeds.”

Lock-Up Agreements

The Transaction Agreement sets forth certain terms for the lock-up agreements applicable to our ordinary shares, subject in all cases to the contractual agreement of the underwriters in this offering. The Transaction Agreement provides that each of Total Produce and TP USA (if they own our ordinary shares) and the C&C Parties must enter into a customary lock-up agreement with the underwriters in this offering on such terms as the underwriters may reasonably require. However, (i) subject to the C&C Parties’ right to an early release of the lock-up restrictions as described below in “—Post-Offering Share Sales,” each such lock-up agreement will terminate no later than 180 days after the date of the final prospectus for this offering, (ii) the lock-up restrictions will apply to the C&C Parties only if all of our officers and directors are subject to similar restrictions and we or the underwriters in this offering obtain a similar agreement from certain of our affiliates and (iii) the C&C Parties may pledge their ordinary shares as security for borrowings if any resulting sale of such ordinary shares would be subject to the restrictions in each such lock-up agreement. In addition, the Transaction Agreement entitles the C&C Parties to a pro rata waiver or termination of any applicable lock-up restrictions to the extent we or the underwriters in this offering grant any discretionary waiver or termination of such restrictions to any other person required to enter into a lock-up agreement. See “Underwriting (Conflict of Interest)” for a description of the lock-up agreements applicable to our ordinary shares.

Post-Offering Share Sales

The Transaction Agreement provides for an early release of the lock-up restrictions applicable to the C&C Parties described above in “—Lock-Up Agreements” under certain circumstances. First, each of the C&C Parties may sell any of its respective Consideration Shares after a period of 90 days following this offering but prior to the end of the applicable lock-up period if and to the extent we are advised by the underwriters in this offering that such sale would not adversely affect overall shareholder value or the U.S. federal income tax treatment of the Share Exchange and such lock-up is waived by the underwriters in this offering. In addition, after the sale by the C&C Parties of Consideration Shares in this offering on a secondary basis as described below in “—Other Key Provisions of the Transaction Agreement—Conditions to Completion,” up to 30% of the remaining aggregate Consideration Shares held by the C&C Parties may be sold prior to the end of the applicable lock-up period if and to the extent that, following this offering, (i) the closing price of an ordinary share equals or exceeds 133% of the price per ordinary share in this offering for any ten trading days within any 15-trading-day period beginning 91 days after this offering or (ii) we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.

 

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Registration Rights

Subject to the lock-up restrictions and early release provisions described above in “—Lock-Up Agreements” and “—Post-Offering Share Sales,” respectively, the Transaction Agreement provides that sales of Consideration Shares by the C&C Parties may be undertaken with the benefit of the Registration Rights Agreement, subject to the terms and conditions thereof, including there being a current and effective resale registration statement covering such Consideration Shares and so long as such Consideration Shares are not subject to a binding commitment at the time of the completion of this offering. For a description of the Registration Rights Agreement, see “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

Post-Completion Distributions and Transfers

The Transaction Agreement provides that, immediately following Completion (or at such other time as the C&C Parties and Total Produce may agree in writing), the following distributions and transfers will occur:

 

   

DFC Holdings will cause Dole Food Company to distribute the promissory note issued by certain affiliates of the C&C Parties in favor of DFC Holdings, dated as of June 30, 2020 (the “C&C Promissory Note”), in the principal amount of $25.0 million, as a dividend to DFC Holdings;

 

   

immediately following the distribution above, DFC Holdings will distribute the C&C Promissory Note as a dividend to TP USA; and

 

   

immediately following the distribution above, TP USA will transfer the C&C Promissory Note to TMG in full satisfaction of the TP USA Promissory Note.

 

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Post-Completion Structure

The following diagram depicts our high-level organizational structure immediately after completion of the Transaction but prior to the completion of this offering:

 

 

LOGO

Other Key Provisions of the Transaction Agreement

Corporate Governance

The Transaction Agreement requires that our board of directors as of immediately prior to the completion of this offering consist of members designated by Total Produce.

For a description of our corporate governance following the completion of this offering, see “Management.”

Representations and Warranties

The Transaction Agreement contains customary representations and warranties made by the C&C Parties, DFC Holdings and the Total Produce Parties as to certain fundamental and other matters. In addition, the Transaction Agreement contains certain representations and warranties by Total Produce as to matters relating to its and its subsidiaries’ (other than DFC Holdings’ and its subsidiaries’) businesses. Except as described in “—Tax Matters” below, none of the representations and warranties in the Transaction Agreement will survive Completion or the termination of the Transaction Agreement.

 

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Covenants and Agreements

The Transaction Agreement contains covenants and agreements among the parties to the Transaction Agreement relating to the following matters, among other things: (i) Total Produce’s efforts to implement the Scheme and the responsibilities of the parties to the Transaction Agreement in respect of the Scheme; (ii) the conduct of Dole Food Company’s and Total Produce’s and its subsidiaries’ (other than DFC Holdings’ and its subsidiaries’) businesses prior to Completion; (iii) cooperation in connection with public announcements; (iv) confidentiality; (v) notification of certain matters prior to Completion; (vi) using efforts to cause Completion to occur, including by obtaining necessary approvals from relevant authorities; (vii) the preparation of the registration statement of which this prospectus forms a part and cooperation by DFC Holdings in connection with this offering; (viii) the adoption by our board of directors of a resolution approving the acquisition of our ordinary shares by certain persons expected to become our directors or officers in connection with the Merger for purposes of Section 16(b) of the Exchange Act; (ix) DFC Holdings’ compliance with the requirements of the Sarbanes-Oxley Act; and (x) DFC Holdings’ cooperation with Total Produce’s efforts to arrange, obtain, syndicate and consummate debt financing in connection with the Transaction.

In addition, the Transaction Agreement provides that, prior to Completion, the conduct of DFC Holdings’ and Dole Food Company’s businesses remains subject to certain approval rights held by TP USA or its board designees pursuant to the organizational documents of DFC Holdings and Dole Food Company as currently in effect.

Waiver of Certain Indemnification Claims

The Transaction Agreement contains a mutual waiver of certain indemnification claims arising from the 2018 Transaction that have been properly asserted and remain unpaid as of the effective time of the Merger or that may be asserted or claimed in the future, excluding claims arising from fraud.

Pursuant to the Transaction Agreement, at the effective time of the Merger, TP USA, on behalf of itself and certain affiliates and representatives (collectively, the “TP Indemnified Parties”), will deem as fully satisfied all claims against the C&C Parties for losses relating to the 2018 Transaction that have then been properly asserted and remain unpaid as of the effective time of the Merger (such claims, “Pending Claims”) and will not deduct from the consideration payable to the C&C Parties in connection with the Merger, or otherwise seek recovery from any of the C&C Parties or their representatives of, losses relating to the 2018 Transaction that have then been properly asserted and remain unpaid as of the effective time of the Merger or that may be asserted or claimed in the future. However, if (i) the aggregate value of losses that are the subject of Pending Claims exceeds $10,000,000 and (ii) the aggregate value of the Consideration Shares calculated at the price per ordinary share in this offering exceeds $225,000,000, then the C&C Parties will remain obligated to indemnify and hold harmless the TP Indemnified Parties in respect of the amount by which the aggregate value of such losses exceeds $10,000,000 (subject to a cap equal to the amount by which such aggregate value of the Consideration Shares exceeds $225,000,000).

In addition, the Transaction Agreement provides that, at the effective time of the Merger, each of David H. Murdock and the C&C Parties, on behalf of itself and certain affiliates and representatives, will deem as fully satisfied all Pending Claims and will not seek recovery from any of the Total Produce Parties, Total Produce’s subsidiaries or their representatives of losses relating to the 2018 Transaction that have then been properly asserted and remain unpaid as of the effective time of the Merger or that may be asserted or claimed in the future.

 

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As of the date of this prospectus, the aggregate value of losses relating to the 2018 Transaction that have been properly asserted and remain unpaid equals approximately $8,509,496 (net of a $3,000,000 agreed deductible) in connection with: (i) losses related to Dole Food Company’s agreement to indemnify ITOCHU Corporation as part of the 2013 sale of Dole Food Company’s Asia and packaged foods business in an aggregate amount equal to $3,888,892 and (ii) losses related to certain Dole Food Company tax audits identified in the 2018 Transaction with Total Produce in an aggregate amount equal to $7,620,604.

Tax Matters

For U.S. federal income tax purposes, the Share Exchange, the Merger and this offering, taken together, are intended to qualify as a tax-deferred transaction described in Section 351 of the Code (the “Intended Tax Treatment”). In connection therewith, the parties to the Transaction Agreement generally agreed to, and to cause their respective subsidiaries to, (i) use reasonable best efforts to cause the Share Exchange, the Merger and this offering to qualify for the Intended Tax Treatment, including considering and negotiating in good faith such amendments to the Transaction Agreement as may reasonably be required in order to obtain such qualification, (ii) not take any action that could reasonably be expected to preclude the Intended Tax Treatment, and (iii) report the Transaction in a manner consistent with the Intended Tax Treatment.

Under the Transaction Agreement, we acknowledge that the C&C Parties may enter into (and cause to be filed with the Internal Revenue Service) a gain recognition agreement in accordance with Treasury Regulations Section 1.367(a)-8 in connection with the Merger (a “Gain Recognition Agreement”). In general, a Gain Recognition Agreement would permit a C&C Party to defer, for U.S. federal income tax purposes, the recognition of gain realized in connection with the Merger. Under the terms of a C&C Party’s Gain Recognition Agreement, such C&C Party would generally be required to recognize gain deferred under such Gain Recognition Agreement if, prior to the expiration or termination of such Gain Recognition Agreement (which would generally expire five full taxable years after the close of the taxable year that includes Completion, or terminate upon the recognition of all gain deferred under such Gain Recognition Agreement), we or our affiliates effect a “triggering event” described in Treasury Regulations Section 1.367(a)-8(j) that does not qualify for an exception under the relevant Treasury Regulations. In general, a taxable disposition to a third party of DFC Holdings, Dole Food Company, or substantially all of the assets thereof, would constitute a “triggering event” for these purposes.

From Completion until the expiration or termination of each C&C Party’s Gain Recognition Agreement, we will generally be required to provide advance notice to the C&C Parties before we, or any of our affiliates, effect a transaction (or series of related transactions) that would reasonably be expected to constitute a “triggering event” with respect to any C&C Party’s Gain Recognition Agreement. We will generally be prohibited from completing any such transaction (or series of related transactions) unless (i) the relevant C&C Parties agree that such transaction (or series of related transactions) would not constitute a “triggering event” that would require gain to be recognized under such C&C Parties’ Gain Recognition Agreements, (ii) we provide each relevant C&C Party with a written opinion of an internationally recognized law or accounting firm reasonably acceptable to the C&C Parties that such transaction (or series of related transactions) “should not” constitute a “triggering event” that would cause any C&C Party to recognize gain with respect to its Gain Recognition Agreement, or (iii) we indemnify and reimburse each C&C Party for the additional tax liability, if any, reasonably expected to result from such transaction (or series of related transactions) prior to effecting such transaction (or series of related transactions).

Additionally, under the terms of the Transaction Agreement, we will generally be obligated to indemnify the C&C Parties for any losses incurred by them in connection with (i) certain breaches of

 

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tax representations or (ii) tax liability arising under Section 367 of the Code or Treasury Regulations Section 1.367(a)-8 resulting from any action or transaction effected by us or our affiliates after Completion. For purposes of such indemnification obligations, the indemnity will be calculated based on certain assumed minimum levels of tax basis by the C&C Parties.

If we are required to indemnify a C&C Party as described above, such C&C Party will be required to pay to us an amount equal to any tax savings realized by such C&C Party on a subsequent disposition of its Consideration Shares. Such tax savings will equal the amount of income taxes such C&C Party would not be required to pay on such disposition due to its increased basis in the disposed Consideration Shares resulting from the event giving rise to the indemnity obligation.

The Transaction Agreement also contains agreements among the parties concerning other tax matters, including return preparation and review rights, control of tax contests, certain tax elections, cooperation provisions and the allocation of transfer taxes.

Conditions to Completion

Completion of the Share Exchange and the Merger is subject to the satisfaction (or waiver, to the extent permitted) of certain conditions, including the following: (i) the effectiveness of the Scheme; (ii) the approval by the requisite majority of Total Produce shareholders of resolutions at the extraordinary general meeting of Total Produce shareholders to be convened in connection with the Scheme; (iii) the expiration, lapse or termination of any applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (iv) the receipt of required approvals from the European Commission; (v) the absence of any binding order prohibiting, enjoining or making illegal Completion or the other transactions contemplated by the Transaction Agreement, the Trademark License Extension (as defined below) or the Registration Rights Agreement; (vi) in the case of the C&C Parties and DFC Holdings, the absence of a material adverse effect relating to Total Produce and its subsidiaries (other than DFC Holdings and its subsidiaries); (vii) the execution and delivery of the Trademark License Extension and the Registration Rights Agreement; (viii) in the case of the Total Produce Parties, the resignation of each director and officer of DFC Holdings and its subsidiaries (other than as approved in writing by Total Produce), including the resignation of each of the C&C Parties’ designees on the board of managers of DFC Holdings and the board of managers of DFC Holdings and the board of directors of Dole Food Company; and (ix) other conditions customary for a transaction of this type.

European Commission merger clearance in respect of the Share Exchange and the Merger was obtained on June 7, 2021 and the waiting period for the consolidation of Total Produce plc and DFC Holdings, LLC under the HSR Act expired on April 15, 2021, thereby satisfying the antitrust conditions to completion of the Share Exchange and the Merger.

In addition, the Transaction Agreement contains certain additional conditions to completion of the Share Exchange and the Merger, including the following: (i) the effectiveness of the registration statement of which this prospectus forms a part; (ii) the approval of our ordinary shares for listing on the NYSE or the Nasdaq Stock Market; (iii) the execution by the underwriters in this offering of an underwriting agreement containing the terms described below; and (iv) our entry into a composition agreement with Irish Revenue (as defined below) and a Special Eligibility Agreement for Securities with The Depository Trust Company in respect of our ordinary shares.

The Transaction Agreement provides that the underwriting agreement will be in form and substance determined by the steering committee, containing (i) such representations, warranties and indemnities by the C&C Parties as are customary in a secondary sale and (ii) unless otherwise approved in writing by the C&C Parties, the following terms:

 

   

a price per ordinary share in this offering that, if ascribed to the Consideration Shares, would result in such Consideration Shares having an aggregate value of at least $215,000,000 (without giving effect to any sale of such Consideration Shares in this offering); and

 

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the sale of Consideration Shares on a secondary basis that will result in net proceeds to the C&C Parties of at least $50,000,000.

On July 27, 2021, the C&C Parties and the Total Produce Parties mutually agreed (i) to waive the condition with respect to the execution of an underwriting agreement containing the terms set forth above and (ii) that the underwriting agreement shall instead contain a price equal to no less than $16.00 per ordinary share. If the conditions to completion of the Share Exchange and the Merger are not satisfied or waived, then this offering will not occur and we will not sell any ordinary shares in this offering.

Termination

The Transaction Agreement may be terminated prior to Completion (i) by Total Produce, upon written notice to the C&C Parties at any time in its sole discretion, (ii) by the C&C Parties, if Completion has not occurred on or before November 15, 2021 (provided such failure to occur was not proximately caused by or did not proximately result from the failure of the C&C Parties or DFC Holdings to perform or comply in any material respect with any of their respective covenants or agreements), or (iii) by the C&C Parties, if a final, non-appealable order has been issued by any relevant authority having competent jurisdiction permanently restraining or prohibiting Completion (provided that the imposition of such order was not proximately caused by the failure of the C&C Parties or DFC Holdings to perform or comply in any material respect with any of their respective covenants or agreements).

In the event of a termination of the Transaction Agreement for any reason, the terms of the 2018 Transaction will remain in effect, including the right of TP USA to exercise its options to acquire the Second Tranche and the Third Tranche.

Trademark License Extension

At Completion, Dole Food Company and Castle & Cooke, Inc., a Hawaii corporation (“Castle”), will enter into a seventh amendment (the “Trademark License Extension”) to the trademark license agreement, dated as of December 7, 1995, by and between Dole Food Company and Castle (as amended from time to time, the “Trademark License Agreement”), pursuant to which Dole Food Company and Castle will agree to extend the term of the Trademark License Agreement until the 15-year anniversary of the date of Completion (unless sooner terminated in accordance with its terms). No extension fee will be payable in connection with the Trademark License Extension and the pre-extension fee arrangements will remain in place. The fee arrangement in place under the Trademark License Agreement requires an annual royalty payment by Castle of 4% of Castle’s gross revenues (defined as gross receipts less sales tax and customer refunds) from sales of gifts and souvenir items sold in connection with the licensed DOLE trademarks at licensed facilities in Hawaii.

Expense Reimbursement Agreement

Concurrently with the execution of the Transaction Agreement, we entered into an expense reimbursement agreement (the “Expense Reimbursement Agreement”) with the other Total Produce Parties, DFC Holdings and the C&C Parties. If Completion occurs, we will bear the costs of the other parties to the Transaction Agreement and Dole Food Company, subject to and in accordance with the terms of the Expense Reimbursement Agreement. If Completion does not occur, DFC Holdings will cause Dole Food Company to bear the costs of the parties to the Transaction Agreement, subject to and in accordance with the terms of the Expense Reimbursement Agreement.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the information contained in this prospectus contains forward-looking statements, that relate to our plans, objectives, estimates and goals. Statements regarding the Transaction and statements regarding our future and projections relating to products, sales, revenues, expenditures, costs and earnings are typical of such statements. Forward-looking statements are based on management’s beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive”, “target” or similar words, or the negative of these words, identify forward-looking statements. The inclusion of this forward-looking information should not be regarded as a representation by us, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to:

 

   

the successful integration of the Total Produce and Dole Food Company companies following the Transaction and the realization of any anticipated benefits and cost savings resulting therefrom;

 

   

weather conditions that affect the production, transportation, storage, import and export of fresh produce or packaged foods;

 

   

adverse weather conditions, natural disasters, crops disease, pests and other natural conditions, which may affect market prices and the demand for our products, and our ability to mitigate such risks;

 

   

our ability to compete and innovate effectively against our present and future competitors;

 

   

changes in interest and currency exchange rates;

 

   

product and raw material supplies and pricing;

 

   

our exposure to product liability claims and associated regulatory and legal actions, product recalls or other legal proceedings relating to our business;

 

   

our ability to generate a sufficient amount of cash to service our indebtedness and fund our operations;

 

   

our ability to operate our business under agreements governing certain of our indebtedness containing financial covenants and other restrictions;

 

   

the impact of pandemics, including the COVID-19 pandemic, including demand for the Company’s products, illness, quarantines, government actions, facility closures, store closures or other restrictions in connection with the COVID-19 pandemic, and the extent and duration thereof, related impact on our ability to meet customer needs and on the ability of third parties on which we rely, including our franchisees, suppliers, customers, contract manufacturers, distributors, to meet their obligations to us, the extent that government funding and reimbursement programs in connection with COVID-19 are available to us, and the ability to successfully implement measures to respond to such impacts;

 

   

our use of herbicides, pesticides and other hazardous substances;

 

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labor disruptions, strikes or work stoppages;

 

   

international conflict;

 

   

acts of crime or terrorism, including any potential impact on our information systems;

 

   

our failure to hire and retain key personnel and highly skilled employees;

 

   

loss of important intellectual property rights;

 

   

the effects of any changes in laws (including the interpretation thereof), regulations, rules, quotas, tariffs, export and import laws on our operations;

 

   

economic crises or a decline in general economic conditions;

 

   

information permitted to be filed and corporate governance practices permitted to be followed as a result of being a “foreign private issuer” under the rules and regulations of the SEC;

 

   

the impact of governmental trade restrictions, including adverse governmental regulation that may impact our ability to access certain markets, such as uncertainty surrounding Brexit, including spillover effects to other Eurozone countries;

 

   

the adequacy of the insurance we maintain;

 

   

the volatility of the trading price of our ordinary shares;

 

   

sale of a large number of ordinary shares, or a perception that such sale may occur, by the C&C Parties; and

 

   

additional factors discussed under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company” and “Business.”

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made except as required by the federal securities laws. In addition, this prospectus contains industry data related to our business and the markets in which we operate. This data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results could differ from the projections.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision to purchase our ordinary shares. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

 

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INDUSTRY, MARKET, AND OTHER DATA

This prospectus contains estimates and information concerning our industry, including market position and the size and growth rates of the markets in which we participate, that are based on industry publications and reports or other publicly available information, and our business and platform, that is based on third-party surveys commissioned by us and our internal sources. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Industry surveys and publications generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy and completeness of the included information. We have not independently verified this third-party information. Similarly, third-party surveys commissioned by us, while believed by us to be reliable, are based on limited sample sizes and have not been independently verified by us.

While we are not aware of any misstatements regarding any industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed under the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” herein.

Certain information in the text of this prospectus is contained in independent industry publications. The source of these independent industry publications is provided below:

 

   

Bain & Company (“Shaping the Consumer of the Future”), available at: https://www.bain.com/insights/shaping-the-consumer-of-the-future/;

 

   

Barilla Foundation & Research Unit on Nutrition, Diabetes and Metabolism, University of Naples Federico II, 2021 (“A one health approach to food, the Double Pyramid connecting food culture, health and climate”), available at: https://www.barillacfn.com/m/publications/a-one-health-approach-to-food1.pdf;

 

   

Deloitte (“The Future of Fresh: Strategies to Realize Value in Fresh Food Category”), available at: https://www2.deloitte.com/content/dam/insights/us/articles/5237_The-future-of-fresh/DI_The-future-of-fresh.pdf;

 

   

Deloitte (“The Future of Fresh: Patterns from the Pandemic”), available at: https://www2.deloitte.com/us/en/insights/industry/retail-distribution/future-of-fresh-food-sales/pandemic-consumer-behavior-
grocery-shopping.html?id=us:2el:3pr:4di6898:5awa:6di:MMDDYY:&pkid=1007310;

 

   

Empathy Research (“Dietary Lifestyles”), available at: https://www.bordbia.ie/globalassets/bordbia2020/industry/insights/new-publications/dietary-lifestyles-report-march-2021.pdf;

 

   

Morning Consult (“Fastest Growing Brands 2019”), available at: https://morningconsult.com/wp-content/uploads/2019/12/Morning-Consult_Fastest-Growing-Brands-2019-Report_FINAL.pdf;

 

   

Nielsen (“Total Food View, Total U.S. xAOC, 26 Weeks Ending 02/27/21, UPC-coded and random-weight/Non-UPC data”);

 

   

Nielsen (“Volume CAGR for Key Produce Categories & Perimeter Departments in U.S. (weight for produce, units for perimeter)”);

 

   

PBH Foundation (“State of the Plate: America’s Fruit & Vegetable Consumption Trends”), available at: https://fruitsandveggies.org/wp-content/uploads/2021/02/2020-PBH-State-of-the-Plate-Report-FINAL.pdf;

 

   

The Packer (“Fresh Trends”), available at: http://cdn.coverstand.com/40749/655554/e9bd20499cc013941d84df3d16a4ff3dfe121ea1.2.pdf;

 

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The United Nations (“Secretary-General’s message on launch of the International Year of Fruits and Vegetables 2021”), available at: https://www.un.org/sg/en/content/sg/statement/2020-12-15/secretary-generals-message-launch-of-the-international-year-of-
fruits-and-vegetables-2021-scroll-down-for-french-version; and

 

   

Vox (“How to reduce your food’s carbon footprint, in 2 charts”), available at: https://www.vox.com/future-perfect/2020/2/20/21144017/local-food-carbon-footprint-climate-environment.

Information contained on or accessible through the websites referenced above are not a part of this prospectus and the inclusion of the website address referenced above in this prospectus is an inactive textual reference only.

In addition, certain information in this prospectus was commissioned by the Company. The Company partially contributed to the PBH Foundation report described above and fully commissioned the following sources:

 

   

GlobalData (“Europe and North America: Fruit and Vegetable Consumption 2015-2019, and Forecast 202-2025”);

 

   

GlobalData (“Fresh Fruit & Vegetables in North American and Europe 2021”); and

 

   

IPSOS (“Awareness and Image of Dole 2020”).

 

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USE OF PROCEEDS

We will receive net proceeds from this offering of approximately $371 million (or approximately $428 million if the underwriters exercise their option to purchase additional ordinary shares in full), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We currently intend to use approximately (i) $60 million of the net proceeds of this offering to pay certain costs related to the Transaction and the consummation of debt financing in connection with the Transaction; (ii) $279 million of the net proceeds of this offering to redeem all of Dole Food Company’s outstanding 7.25% senior secured notes due 2025, together with amounts available under the amended Credit Agreement; (iii) $79 million of the net proceeds of this offering, together with cash on hand and amounts available under the amended Credit Agreement, to repay in full the existing Total Produce revolving credit facility; and (iv) any remaining net proceeds of this offering, together with cash on hand and amounts available under the amended Credit Agreement, to repay in full Dole Food Company’s existing credit facilities (as defined below).

The existing Total Produce revolving credit facility had an outstanding balance of $500 million as of March 31, 2021, and an outstanding balance of $323.5 million as of July 16, 2021. The existing Total Produce revolving credit facility is secured and guaranteed by Total Produce and certain subsidiaries.

The existing Total Produce revolving credit facility is a five-year multi-currency senior secured revolving credit facility, which is available to Total Produce and certain of its subsidiary co-borrowers. Interest on the borrowings will be payable, at the option of the applicable borrower, either at (x) LIBOR plus 1.00 to 2.75% or (y) a base rate plus 0.00% to 1.75%, in each case, to be determined based on ratings and total net leverage ratio. In addition, Total Produce pays fees on unused commitments. See Note 11 “Borrowings” to the consolidated financial statements of Total Produce, included herein for additional information.

Dole Food Company’s existing credit facilities had an outstanding balance of $860.9 million as of March 31, 2021, and an outstanding balance of $876.9 million as of July 16, 2021. Dole Food Company’s borrowings under its existing credit facilities are secured by substantially all the U.S. assets of Dole Food Company and its material domestic subsidiaries.

Dole Food Company’s existing credit facilities consist of (i) a term loan credit agreement (the “term loan”) and an asset-based revolving credit agreement (“ABL revolver”) with certain lenders (the term loan and the ABL revolver, together, the “credit facilities”). The term loan has a maturity date of April 6, 2024 and bears interest, at Dole Food Company’s option, at either (i) LIBOR plus 2.75% with a LIBOR floor of 1.00% or (ii) a base rate plus 1.75% to 2.00%. The ABL revolver has a maturity date of April 6, 2022 and bears interest, at Dole Food Company’s option, at either (i) LIBOR plus 1.5% to 2.00%, with a LIBOR floor of 0% or (ii) a base rate plus 0.5% to 1.00%, in each case, based on Dole’s average historical excess availability under the ABL revolver. See Note 12 “Notes Payable and Long-Term Debt” to the consolidated financial statements of DFC Holdings, included herein for additional information.

 

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DIVIDEND POLICY

Dole plc’s principal capital allocation priorities are reinvesting into the existing business, pursuing external growth opportunities, and returning cash to the holders of its ordinary shares, including in the form of cash dividends. Total Produce has a long history of paying regular interim and final cash dividends to its shareholders each year, progressively increasing the dividend payout in line with growth in earnings.

Following completion, Dole plc intends to pay quarterly cash dividends on our ordinary shares on a basis consistent with Total Produce’s historical dividend track record.

Any declaration and payment of future dividends to holders of our ordinary shares will be at the sole discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends and other considerations that our board of directors deems relevant. The declaration, amount and timing of payment of any future dividends will therefore be subject to the recommendation of our board of directors based on its assessment of these factors at the time. Because we are a holding company and have no direct operations, we will only be able to pay dividends from our available cash on hand and any funds we receive from our subsidiaries. See “Risk Factors—Risks Related to this Offering and Our Ordinary Shares—We intend to pay regular dividends on our ordinary shares, but our ability to do so may be limited.”

Any future determination to pay dividends will also be subject to applicable laws, including the Irish Companies Act, which requires, among other things, Irish companies to have profits available for distribution (known as distributable reserves) equal to or greater than the amount of the proposed dividend. Unless we create sufficient distributable reserves from our business activities, the creation of such distributable reserves would involve a reduction of our share premium account (to the extent such share premium is available), which would require the approval of 75% of our shareholders present and voting at a shareholder meeting, and of the Irish High Court.

Our future ability to pay cash dividends on our shares may also be limited by the terms of our current and any future debt or preferred securities. In addition, certain of our debt agreements, including the Credit Agreement (as defined below) may limit our ability and the ability of certain of our subsidiaries to pay dividends. “Risk Factors—Risks Related to this Offering and Our Ordinary Shares—We intend to pay regular dividends on our ordinary shares, but our ability to do so may be limited.”

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2021:

 

   

on an actual basis; and

 

   

on a pro forma as adjusted basis, giving effect to the Transaction and the consummation of debt financing in connection of the Transaction, including the pro forma adjustments discussed under “Unaudited Pro Forma Condensed Consolidated Financial Information,” and giving further effect to (i) the sale by us of 25,000,000 ordinary shares in this offering at the initial public offering price of $16.00 per share (after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us) and (ii) the intended use of proceeds therefrom as described under “Use of Proceeds.”

The following table is derived from and should be read together with the sections of this prospectus entitled “Use of Proceeds,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company” and the financial statements and accompanying notes included elsewhere in this prospectus.

 

     As of March 31, 2021  
     Actual(1)      Pro Forma
as Adjusted
 
     (in thousands, except share
numbers)
 

Cash and cash equivalents

   $ 358,350      $ 200,000  

Debt:

     

Total debt

     600,827        1,398,000 (2) 
  

 

 

    

 

 

 

Ordinary shares, par value $0.01 per share; 300,000,000 ordinary shares authorized and pro forma as adjusted; 93,098,644 ordinary shares issued and outstanding, pro forma as adjusted

   $ 4,865      $ 931  

Preferred shares, par value $0.001 per share; 300,000,000 shares of preferred shares authorized and pro forma as adjusted; 0 shares of preferred shares issued and outstanding and pro forma as adjusted

             

Additional paid-in capital

     196,730        790,515  

Accumulated equity

     341,773        293,195  
  

 

 

    

 

 

 

Total shareholders’ equity attributable to Total Produce and Dole plc

     543,368        1,084,641  
  

 

 

    

 

 

 

Total capitalization

   $ 1,144,195      $ 2,482,641  

 

(1)

Represents Total Produce historical.

(2)

Consists of amount outstanding under the Facilities. In addition, we would have had $235.0 million available for borrowing under the Revolving Credit Facility.

 

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DILUTION

If you invest in our ordinary shares in this offering, you will experience immediate dilution in the net tangible book value per ordinary share upon the completion of this offering.

As used in this “Dilution” section, (i) net tangible book value equals tangible assets less total liabilities less redeemable noncontrolling interests, (ii) our adjusted net tangible book value represents net tangible book value calculated based on combined Total Produce and DFC Holdings historical net tangible book value, after giving effect to the Transactions, calculated from the first three columns of our Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2021 included in this prospectus, (iii) our pro forma net tangible book value represents pro forma net tangible book value, calculated from our Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2021 included in this prospectus, (iv) our as adjusted net tangible book value per share is determined by dividing our adjusted net tangible book value by the total number of our outstanding ordinary shares of 68.1 million that will be outstanding immediately prior to the completion of this offering but after giving effect to the Transaction, and (v) our pro forma net tangible book value per share is determined by dividing our pro forma net tangible book value by the total number of our outstanding ordinary shares of 93.1 million that will be outstanding immediately after giving effect to the Transaction and the completion of this offering.

Our as adjusted net tangible book value as of March 31, 2021, was approximately $(293.0) million, or approximately $(4.30) per share.

After giving effect to the sale of ordinary shares in this offering at an initial public offering price of $16.00 per share, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of March 31, 2021 would have been approximately $39.8 million, or approximately $0.43 per share. This represents an immediate increase in the net tangible book value of $4.73 per share to our existing shareholders and an immediate dilution (i.e., the difference between the offering price and the pro forma net tangible book value after this offering) to new investors participating in this offering of $15.57 per share.

The following table illustrates the per share dilution to new investors participating in this offering:

 

Initial public offering price per share

     $ 16.00  

As adjusted net tangible book value per share as of March 31, 2021

   $ (4.30  

Increase per share attributable to new investors in this offering

     4.73    
  

 

 

   

Pro forma net tangible book value per share

       0.43  
    

 

 

 

Dilution per share to new investors in this offering(1)

     $ 15.57  

 

(1)

Dilution is determined by subtracting pro forma net tangible book value per share from the initial public offering price paid by a new investor.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information is presented to illustrate the estimated effects of:

 

  (i)

the Transaction based on the historical financial position and results of operations of Total Produce and DFC Holdings. The Transaction will be accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, “Business Combinations” (“ASC 805”), with Total Produce deemed to be the acquirer for financial accounting purposes. This includes adjustments to eliminate the intercompany balances and transactions between the two companies and an estimate of the fair value of the assets and liabilities of DFC Holdings to be acquired by Total Produce;

 

  (ii)

the application of the net proceeds of this offering as described under “Use of Proceeds” (the “IPO Transaction”); and

 

  (iii)

the consummation of debt financing in connection with the Transaction and IPO Transaction (the “Debt Issuance” and, together with the Transaction and IPO Transaction, the “Pro Forma Transactions”). This includes the repayment of the current combined debt of both companies using a combination of the IPO proceeds and proceeds from the new debt arrangement.

It is presented as follows:

 

   

The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2020 and for the three months ended March 31, 2021 were prepared based on (i) the historical audited consolidated statement of operations of Total Produce for the fiscal year ended December 31, 2020 and the historical audited consolidated statement of operations of DFC Holdings for the fiscal year ended December 31, 2020 and (ii) the historical unaudited consolidated statement of operations of Total Produce for the three months ended March 31, 2021 and the historical unaudited consolidated statement of operations of DFC Holdings for the three months ended March 31, 2021.

 

   

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2021 was prepared based on (i) the historical unaudited consolidated balance sheet of Total Produce as of March 31, 2021 and (ii) the historical unaudited consolidated balance sheet of DFC Holdings, as of March 31, 2021.

Assumptions underlying the pro forma adjustments related to the Pro Forma Transactions are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed consolidated financial information. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2020 and for the three months ended March 31, 2021 give effect to the Pro Forma Transactions as if they had occurred on January 1, 2020. The accompanying unaudited pro forma condensed consolidated balance sheet as of March 31, 2021 gives effect to the Pro Forma Transactions as if they had occurred on March 31, 2021.

The unaudited pro forma condensed consolidated financial information has been prepared by the Company for illustrative and informational purposes only in accordance with Regulation S-X Article 11, “Pro Forma Financial Information” and is not necessarily indicative of what the combined company’s condensed consolidated results of operations actually would have been had the Pro Forma Transactions been completed as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future operating results of the combined company. The unaudited condensed consolidated pro forma financial information does not include adjustments to reflect any potential revenue synergies or cost savings that may be achievable in connection with the Pro Forma Transactions.

 

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The acquisition method of accounting requires the total purchase price to be allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the amount assigned to tangible and intangible assets acquired and liabilities assumed is recognized as goodwill. Management’s estimates of fair values of tangible and intangible assets acquired and liabilities assumed is based in part on historical third-party valuations. The preliminary allocation of the purchase price reflected in this unaudited pro forma condensed consolidated financial information is based upon a historical third-party valuation, and the Company’s estimates and assumptions are subject to change. Therefore, upon additional analysis, it is possible that the fair values of assets acquired and liabilities assumed could differ from those presented in the unaudited pro forma condensed consolidated financial information and such differences could be material.

The unaudited pro forma condensed consolidated financial information reflects adjustments that the Company believes are necessary to present the Company’s unaudited pro forma condensed consolidated financial information following the closing of the Pro Forma Transactions as of and for the periods indicated. The adjustments are based on currently available information and assumptions that the Company believes are, under the circumstances and given the information available at this time, reasonable, directly attributable to the Transactions, and reflective of adjustments necessary to report the Company’s statements of operations as if the Pro Forma Transactions were completed on January 1, 2020 and its balance sheet as if the Pro Forma Transactions were completed on March 31, 2021. In addition, the unaudited pro forma condensed consolidated financial information will differ from the final purchase accounting for a number of reasons, including the fact that the estimates of fair values of assets acquired and liabilities assumed are preliminary and subject to change when the formal valuation and other analyses are finalized. Upon completion of the valuation analysis, there may be additional increases or decreases to the recorded book values of DFC Holdings’ assets and liabilities, including, but not limited to trademarks and property, plant, equipment. The differences between the preliminary estimates and the final purchase accounting could have a material impact on the accompanying unaudited pro forma condensed consolidated financial information. The preliminary estimates associated with purchase accounting are expected to be finalized within the measurement period provided by ASC 805.

 

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Unaudited Pro Forma Condensed Consolidated Statement of Operations

for year ended December 31, 2020

(U.S. Dollars in millions except share and per share amounts)

 

    Total
Produce
Historical
    DFC
Holdings
Historical
    Transaction Accounting Adjustments  
    Transaction           IPO
Transaction
          Debt
Transactions
          December 31,
2020
Dole plc
 

Consolidated Statement of Operations

                 

Revenue

  $ 4,346     $ 4,672     $ (48     A     $       $       $ 8,970  

Cost of sales

    (4,012     (4,311     50       B                       (8,273
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Gross profit

    334       361       2                         697  

Selling, marketing and general and administrative expenses

    (266     (191     (4     C       (28     I, J               (489
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Operating income

    68       170       (2       (28               208  

Other (expense)/income, net

    (1     (29     15       F                       (15

Interest income

    3       3                               6  

Interest expense

    (11     (78                     17       G       (72
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Income (loss) from continuing operations before income taxes and income from investments accounted for under the equity method

    59       66       13         (28       17         127  

Income tax expense

    (18     (24           E       3       H       (5     H       (44

Equity in net earnings of investments accounted for under the equity method

    30       2       (15     F                       17  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income

    71       44       (2       (25       12         100  

Net income attributable to noncontrolling interests

    (19     (2                             (21
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income attributable to Dole plc

  $ 52     $ 42     $ (2     $ (25     $ 12       $ 79  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income per ordinary share—Basic

  $ 0.1351                                   $ 0.8599  

Net income per ordinary share—Diluted

  $ 0.1349                                   $ 0.8599  

Weighted average shares outstanding—Basic (in thousands)

    388,560                                     93,099  

Weighted average shares outstanding—Diluted (in thousands)

    389,143                                     93,099  

See accompanying “Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.”

 

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Unaudited Pro Forma Condensed Consolidated Statement of Operations

for three months ended March 31, 2021

(U.S. Dollars in millions, except share and per share amounts)

 

    Total
Produce
Historical
    DFC
Holdings
Historical
    Transaction Accounting Adjustments  
    Transaction           IPO
Transaction
          Debt
Transactions
          March 31,
2021
Dole plc
 

Consolidated Statement of Operations

                 

Revenue

  $ 1,051     $ 1,233     $ (15     A     $       $       $ 2,269  

Cost of sales

    (967     (1,096     16       B                       (2,047
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Gross profit

    84       137       1                         222  

Selling, marketing and general and administrative expenses

    (71     (61           C       (3     I, J               (135
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Operating income

    13       76       1         (3               87  

Other income/(expense), net

          5             F                       5  

Interest income

          1                               1  

Interest expense

    (2     (17                     6       G       (13
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Income (loss) from continuing operations before income taxes and income from investments accounted for under the equity method

    11       65       1         (3       6         80  

Income tax expense

    (1     (21           E       1       H       (2     H       (23

Equity in net earnings of investments accounted for under the equity method

    16             (15     F                       1  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income

    26       44       (14       (2       4         58  

Net income attributable to noncontrolling interests

    (5     (1                             (6
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income attributable to Dole plc

  $ 21     $ 43     $ (14     $ (2     $ 4       $ 52  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net income per ordinary share—Basic

  $ 0.0548                                   $ 0.5658  

Net income per ordinary share—Diluted

  $ 0.0547                                   $ 0.5658  

Weighted average shares outstanding—Basic (in thousands)

    388,725                                     93,099  

Weighted average shares outstanding—Diluted (in thousands)

    389,894                                     93,099  

See accompanying “Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.”

 

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Unaudited Pro Forma Condensed Consolidated Balance Sheet

as of March 31, 2021

(U.S. Dollars in millions, except share and per share amounts)

 

    Total
Produce
Historical
    DFC
Holdings
Historical
    Transaction Accounting Adjustments        
    Transaction           IPO
Transaction
          Debt
Transactions
          March 31,
2021

Dole plc
 

Consolidated Balance Sheet Data

                 

Cash and cash equivalents

  $ 358     $ 49     $       $ 353       Q     $ (560     S     $ 200  

Trade, grower and other receivables

    427       566       (7     K, L                       986  

Inventories

    139       249       2       K                       390  

Prepaid expenses and other assets

    24       58                               82  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total current assets

    948       922       (5       353         (560       1,658  

Property, plant and equipment, net

    208       1,111       (30     K                       1,289  

Investments in non-consolidated entities

    477       26       (364     K, M                       139  

Goodwill & intangible assets

    290       584       170       K, O                       1,044  

Other long-term assets

    178       358       (5     K                       531  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total assets

    2,101       3,001       (234       353         (560       4,661  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Accounts payable

    583       248       (87     K, L, N                       744  

Accrued liabilities

          406       65       N                       471  

Current portion of long-term debt

    44       83                       36       S       163  

Other current liabilities

    36       70       15       N                       121  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total current liabilities

    663       807       (7               36         1,499  

Long-term debt

    557       1,236       18       K               (576     S       1,235  

Other long-term liabilities

    185       521       (25     K, P                       681  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total liabilities

    1,405       2,564       (14               (540       3,415  

Ordinary shares

    5                     (4     R               1  

Retained Earnings (Deficit)

    478       (249     242         (21     I, J       (20     T       430  

Additional paid-in-capital

    197       774       (559       378       Q               790  

Redeemable noncontrolling interests

    31                                     31  

Accumulated other comprehensive income

    (136     (97     97                         (136

Noncontrolling interests

    121       9                               130  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total Equity

    696       437       (220       353         (20       1,246  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total Liabilities and Equity

  $ 2,101     $ 3,001     $ (234     $ 353       $ (560     $ 4,661  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

See accompanying “Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.”

 

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(U.S. Dollars in millions, except per share amounts)

1. Basis of Presentation

The unaudited pro forma condensed consolidated financial information presented herein has been prepared using the Total Produce’s and DFC Holdings’ historical financial statements, and giving pro forma effect to the Pro Forma Transactions described herein in accordance with Article 11 of Regulation S-X.

This unaudited pro forma condensed consolidated financial information should be read in conjunction with the financial statements of Total Produce and DFC Holdings as noted below:

 

   

Total Produce’s historical audited consolidated financial statements, and related notes thereto, for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, and Total Produce’s historical unaudited consolidated financial statements, and related notes thereto, for the three months ended March 31, 2021 included in this prospectus; and

 

   

DFC Holdings’ historical audited consolidated financial statements, and related notes thereto, for the years ended December 31, 2020, December 28, 2019 and December 29, 2018, and DFC Holdings’ historical unaudited consolidated financial statements, and related notes thereto, for the three months ended March 31, 2021 included in this prospectus.

2. Preliminary Purchase Price Allocation

The estimated consideration paid to the existing owners of DFC Holdings related to the Transaction consisted of:

 

  i.

as part of the negotiations of the Transaction Agreement, the C&C Parties and Total Produce agreed that, as a condition to closing the proposed transactions, the Consideration Shares would have an aggregate value of at least $215.0 million. This was a negotiated figure to ensure the C&C Parties would receive a minimum return for the Consideration Shares. On July 27, 2021, the C&C Parties and the Total Produce Parties mutually agreed (i) to waive the condition with respect to the execution of an underwriting agreement containing the terms set forth above and (ii) that the underwriting agreement shall instead contain a price equal to no less than $16.00 per ordinary share.

 

  ii.

settlement of existing loans outstanding to DFC Holdings totaling $25.0 million

 

  iii.

the estimated fair value of $355.3 million for Total Produce’s initial 45% stake in DFC Holdings

 

     Consideration  

Value of share consideration

   $ 190  

Loan settlement

     25  

Estimated fair value of initial consideration for 45% interest

     355  
  

 

 

 

Total consideration for 100%

   $ 570  

For purposes of the unaudited pro forma condensed consolidated financial information, the Company has preliminarily allocated the purchase price related to the Transaction to the acquired net tangible and intangible assets based on their estimated fair values as of the projected date of the Transaction. As such, the assets acquired and liabilities assumed, including intangible assets, presented in the table below are provisional and will be finalized in a later period once the fair value procedures are completed. There can be no assurance that the final determination will not result in material changes from these preliminary amounts.

 

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The following table summarizes the preliminary purchase price allocation for DFC Holdings’ historical assets and liabilities as of March 31, 2021:

 

     DFC
Holdings
Historical
     Fair value
adjustments
    March 31,
2021
 

Assets:

       

Cash and cash equivalents

   $ 49      $     $ 49  

Trade, grower and other receivables

     566        (7     559  

Inventories

     249        2       251  

Prepaid expenses and other assets

     58              58  
  

 

 

    

 

 

   

 

 

 

Total current assets acquired

     922        (5     917  

Property, plant and equipment, net

     1,111        (30     1,081  

Investments in non-consolidated entities

     26        (2     24  

Goodwill

     330        (330      

Intangible assets

     254        24       278  

Other long-term assets

     358        (5     353  
  

 

 

    

 

 

   

 

 

 

Total assets acquired

     3,001        (348     2,653  
  

 

 

    

 

 

   

 

 

 

Liabilities:

       

Accounts payable

     248        (7     241  

Accrued liabilities

     406              406  

Current portion of long-term

     83              83  

Other current liabilities

     70              70  
  

 

 

    

 

 

   

 

 

 

Total current liabilities assumed

     807        (7     800  

Long-term debt

     1,236        18       1,254  

Other long-term liabilities

     521        (25     496  
  

 

 

    

 

 

   

 

 

 

Total liabilities assumed

     2,564        (14     2,550  
  

 

 

    

 

 

   

 

 

 

Net assets acquired

     437        (334     103  
  

 

 

    

 

 

   

 

 

 

Non-controlling interest acquired

     9              9  

Total consideration paid

     570              570  
  

 

 

    

 

 

   

 

 

 

Goodwill

   $ 142      $ 334     $ 476  
  

 

 

    

 

 

   

 

 

 

The excess of purchase consideration over net assets assumed is reflected as goodwill, which represents the strategic value assigned to DFC Holdings, including expected benefits from synergies resulting from the acquisition, as well as the knowledge and experience of the workforce in place. In accordance with applicable accounting standards, goodwill is not amortized and will be tested for impairment at least annually, or more frequently, if certain indicators are present.

Amounts preliminarily allocated to intangible assets and goodwill may change significantly, and amortization methods and useful lives may differ from the assumptions that have been used in this unaudited pro forma condensed consolidated financial information, any of which could result in a material change in operating expenses.

3. Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Consolidated Statements of Operations

The Transaction Accounting Adjustments are based on preliminary estimates and assumptions that are subject to change.

 

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Transaction Accounting Adjustments related to Reclassification

Certain balances and transactions presented in the historical financial statements of DFC Holdings included within the unaudited pro forma condensed consolidated statements of operations have been reclassified within the Transaction column to conform to the presentation of the financial statements of Total Produce. The reclassifications are not material.

Transaction Accounting Adjustments related to the Transaction

The following adjustments have been reflected in the unaudited pro forma condensed consolidated statements of operations and are related to the Transaction. The Transaction is reflected within the unaudited pro forma condensed consolidated statements of operations as if the acquisition had occurred on January 1, 2020. Therefore, the Transaction Accounting Adjustments below are related to the year ended December 31, 2020 unless otherwise noted:

 

  A.

Reflects estimated revenue of $14.8 million and $47.6 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, associated with sales of products between DFC Holdings and Total Produce that should be eliminated in consolidation as a result of the Transaction.

 

  B.

Reflects estimated cost of sales of $14.8 million and $47.6 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, associated with sales of products between DFC Holdings and Total Produce that should be eliminated in consolidation as a result of the Transaction, reduction in depreciation of $1.0 million and $4.0 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, as part of Note D below offset by the impact of the estimated Fair Value uplift on inventory of $0.0 million and $2.3 million for the three months ended March 31, 2021 and year ended December 31, 2020, respectively:

 

     Three months
ended March 31,
2021
    Year ended
December 31,
2020
 

Elimination of intercompany purchases

   $ (15   $ (48

Depreciation reduction as a result of fair value estimate

     (1 )D      (4 )D 

One-time expense – Impact of fair value uplift on inventory

           2  
  

 

 

   

 

 

 

Transaction accounting adjustments to cost of sales

   $ (16   $ (50

 

  C.

Reflects impact of fair value uplift on assets disposed of ($4.9 million) for the year-ended December 31, 2020 offset by reduction in depreciation of $1.3 million for the year-ended December 31, 2020 as part of Note D below:

 

     Three months
ended March 31,
2021
     Year ended
December 31,
2020
 

Depreciation reduction as a result of fair value estimate

   $      $ (1 )D 

Impact of fair value uplift on assets disposed of during the period

            5  
  

 

 

    

 

 

 

Transaction accounting adjustments to selling, marketing and general and administrative (SMG&A) costs

   $      $ 4  

 

  D.

Reflects the adjustment of $1.3 million and $5.2 million for the three months ended March 31, 2021 and the year ended December 31, 2020 respectively, to lower depreciation expense related to the lower estimated basis of the acquired property, plant & equipment. The estimated fair value and useful life calculations are preliminary and subject to change after the Company finalizes its review of the specific types, nature, age, condition and location of the Company’s property, plant & equipment. The following table summarizes the

 

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  changes in the estimated depreciation expense, which is recorded in cost of sales and SMG&A within the unaudited pro forma condensed consolidated statements of operations:

 

     Three months
ended March 31,
2021
    Year ended
December 31,
2020
 

Estimated DFC Holdings depreciation expense based on lower basis of the acquired property, plant & equipment

   $ 22     $ 86  

Reversal of DFC Holdings depreciation expense

     (23     (91
  

 

 

   

 

 

 

Transaction accounting adjustments to depreciation expense

   $ (1   $ (5

 

  E.

Reflects the tax-effect of the Transaction Accounting Adjustments related to the Transaction before income taxes at respective statutory income tax rates applied on a jurisdictional basis and other adjustments that are more likely than not to be realized from positive evidence introduced from the Transaction Accounting Adjustments related to the Transaction before income taxes. The effective tax rate in future years is expected to vary from these respective statutory income tax rates applied on a jurisdictional basis.

Transaction Accounting Adjustments related to IPO and Debt transactions

The following adjustments have been reflected in the unaudited pro forma condensed consolidated statements of operations and are related to the IPO and Debt transactions:

 

  F.

Reflects the adjustments related to Total Produce’s investment in DFC Holdings:

 

  (i)

adjustment of Total Produce’s original investment in DFC Holdings to its current fair market value.

 

  (ii)

reversal of Total Produce’s share of DFC Holdings’ earnings, net of tax

 

i. adjustment of Total Produce’s original investment in DFC Holdings to its current
fair market value

   Three months
ended March 31,
2021
     Year ended
December 31,
2020
 

Estimated fair value of Total Produce’s 45% investment in DFC Holdings

   $      $ 355  

Carrying value of Total Produce’s 45% investment in DFC Holdings

            (340
  

 

 

    

 

 

 

Fair value adjustment to Total Produce’s 45% investment in DFC Holdings recognized in other income/(expense)

   $      $ 15  

 

ii. reversal of Total Produce’s share of DFC Holdings’ earnings, net of tax

   Three months
ended March 31,
2021
    Year ended
December 31,
2020
 

Total Produce’s share of DFC Holdings’ earnings, net of tax

   $ (21   $ (22

Deferred tax recognized on the change in Total Produce’s temporary taxable basis difference on its investment in DFC Holdings

     6       7  
  

 

 

   

 

 

 

Transaction accounting adjustments to income from equity method investments

   $ (15   $ (15

 

  G.

Reflects the decrease in interest expense of $6.1 million and decrease in interest expense of $17.4 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, including the related accretion of original issue discount ($0.0 million and $14.2 million, respectively), early redemption fees on senior secured notes ($0.0 million and $5.5 million, respectively), and amortization of deferred financing costs ($1.3 million and $5.0 million, respectively) for the three months ended March 31, 2021 and

 

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  for the year ended December 31, 2020 as a result of the issuance of new debt in conjunction with the Debt Issuance.

 

     Three months
ended March 31,
2021
    Year ended
December 31,
2020
 

Interest on extinguished debt

   $ (19   $ (89

One-time expense—Extinguishment of old debt issuance costs

           14  

One-time expense—Early repayment fee on senior secured bonds

           6  

Amortization of new debt issuance costs

     1       5  

Interest on new debt issuance

     12       47  
  

 

 

   

 

 

 

Transaction accounting adjustments to interest expense

   $ (6   $ (17
  

 

 

   

 

 

 

 

  H.

Reflects the tax-effect of the Transaction Accounting Adjustments related to the IPO and Debt Transactions before income taxes at respective statutory income tax rates applied on a jurisdictional basis. The effective tax rate in future years is expected to vary from these respective statutory income tax rates applied on a jurisdictional basis.

 

  I.

Represents incremental public company costs of $2.5 million and $10.0 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, arising from the IPO transaction.

 

  J.

Represents one-time public company costs of $0.0 million and $18.4 million for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, including accounting expenses, audit and tax fees, investment banker fees and other professional services specifically related to merger and acquisition activities and not directly and incrementally attributable to the IPO or debt transactions.

4. Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet

The Transaction Accounting Adjustments to the unaudited pro forma condensed consolidated balance sheet are based on preliminary estimates and assumptions that are subject to change. The following Transaction Accounting Adjustments have been reflected in the unaudited pro forma condensed consolidated balance sheet as of March 31, 2021:

 

  K.

Reflects management’s estimates of the fair values of tangible and intangible assets acquired and liabilities assumed is based in part on historic third-party valuations. A summary of the fair value adjustments is noted below:

 

     Amount
March 31,
2021
 

Trade, grower and other receivables

   $ (7

Inventories

     2  

Property, plant and equipment, net

     (30

Investments in non-consolidated entities

     (2

Intangible assets

     24  

Other long-term assets

     (5

Accounts payable

     (7

Long-term debt

     18  

Other long-term liabilities

   $ (25

 

  L.

Reflects elimination of trade receivables and payables of $6.6 million between Total Produce and DFC Holdings as of March 31, 2021.

 

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Table of Contents
  M.

Reflects the elimination of Total Produce’s balance of its existing investment in DFC Holdings of $362.5 million as of March 31, 2021.

 

  N.

Reclassification of certain assets and liabilities as a result of different classifications in the financial statements:

 

     Amount
March 31,
2021
 

Reclassification of accrued liabilities from accounts payable:

  

Accrued liabilities

   $ 80  

Accounts payable

     (80

Reclassification of other current liabilities from accrued liabilities

  

Other current liabilities

     15  

Accrued liabilities

   $ (15

 

  O.

Represents elimination of existing DFC Holdings goodwill of $329.8 million and new goodwill of $476.0 million as of March 31, 2021 as a result of the preliminary purchase price allocation.

 

  P.

The Company is subject to U.S. federal, state and local income taxes in each jurisdiction it operates and will file respective income tax returns for such jurisdictions. This adjustment reflects the derecognition of deferred liabilities of $25.3 million as of March 31, 2021 in connection with the IPO Transaction assuming the highest enacted statutory income tax rates by jurisdiction.

Transaction Accounting Adjustments related to IPO and Debt transactions

 

  Q.

The unaudited pro forma condensed consolidated balance sheet reflects expected proceeds from the sale of 25.0 million ordinary shares in this offering, at the initial public offering price of $16.00 per ordinary share, for total gross proceeds of $400.0 million, net of underwriting discounts and commissions as follows:

 

     Amount
March 31,
2021
 

Gross offering proceeds

   $ 400  

Estimated transaction costs including accounting, legal and other professional service fees.

     (47
  

 

 

 

Net proceeds

   $ 353  

 

  R.

Reconciliation of shares in issue:

 

     Number
of shares
(million)
 

3/31/2021 Total Produce shares in issue

     411  

Less Treasury shares

     (22

Total Produce share options outstanding

     5  
  

 

 

 

Total Produce shares pre transaction

     394  

Shares issued as consideration

     83  

Shares in issue post acquisition

     477  

Consolidation of Total Produce shares (1 shares in Dole plc for every 7 shares in Total Produce)

     (409

Issuance of new shares in Dole plc

     25  
  

 

 

 

Dole plc shares in issue post IPO

     93  

At par value of $0.01 per share

     1  

Par value of Total Produce shares in issue at 3/31/2021

     5  

Change in par value of shares in issue

   $ (4

 

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Table of Contents
  S.

Represents the repayment of outstanding debt with the net proceeds from the IPO Transaction, less unamortized debt issuance costs of $32.7 million and early repayment fee on senior secured bonds of $5.5 million.

 

     Amount
March 31,
2021
 

Net offering proceeds

   $ 353  

Estimated Early repayment fee on senior secured bonds

     (6

Estimated Debt issuance costs

     (32
  

 

 

 

Repayment of outstanding debt

   $ 315  

 

Repayment of outstanding debt reconciliation

   Amount
March 31,
2021
 

Current portion of long-term debt prior to transaction

   $ 127  

Long-term debt prior to transaction

     1,793  
  

 

 

 

Total debt prior to transaction

     1,920  

Total cash and cash equivalents prior to transaction

     (407
  

 

 

 

Net debt prior to transaction

     1,513  
  

 

 

 

Current portion of long-term debt post transaction

     163  

Long-term debt post transaction

     1,235  
  

 

 

 

Total debt post transaction

     1,398  

Total cash and cash equivalents post transaction

     (200
  

 

 

 

Net debt post transaction

     1,198  
  

 

 

 

Repayment of outstanding debt

   $ 315  
  

 

 

 

This includes the full repayment of the existing debt facilities using the proceeds from the IPO and the new debt facilities.

 

Use of funds

   Amount
March 31,
2021
 

Cash and cash equivalents:

  

Total Produce Historical

     358  

DFC Holdings Historical

     49  

IPO Transaction

     353  
  

 

 

 
     760  
  

 

 

 

Use of funds to repay debt

     (540

Use of funds for debt transaction costs (Note T)

     (20
  

 

 

 

Total use of funds

     (560
  

 

 

 

Dole plc pro forma cash and cash equivalents

     200  
  

 

 

 

Current portion of long-term debt:

  

Total Produce Historical

     44  

DFC Holdings Historical

     83  
  

 

 

 
     127  
  

 

 

 

Reclassification of long—term debt to current debt as a result of debt transaction

     36  
  

 

 

 

Dole plc pro forma current portion of long-term debt

     163  
  

 

 

 

 

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Use of funds

   Amount
March 31,
2021
 

Long-term debt:

  

Total Produce Historical

     557  

DFC Holdings Historical

     1,236  

Transaction adjustments

     18  
  

 

 

 
     1,811