Campbell Soup To Buy Bolthouse Farms, Impact Net Payout Yield
Before the open today, Campbell Soup (CPB) announced a $1.55B deal to purchase Bolthouse Farms . The deal gives Campbell access to the rapidly growing market for packaged foods. The deal is expected to be accretive by $.06 in 2013 with the use of cash and/or debt to finance the purchase price. Founded in 1915, Bolthouse is a vertically integrated food and beverage company focused on developing, manufacturing and marketing proprietary, high value-added natural, healthy products. The company has leading market positions in fresh carrots and super-premium beverages in the U.S., along with a growing presence in refrigerated salad dressings. While an intriguing deal, it does bring up an interesting dilemma for our Net Payout Yields (NPY) model that owns Campbell Soup. The company expects to suspend the strategic share repurchase plan in order to use the cash to pay for this deal. Campbell was recently yielding around 11% with only 3.5% coming from d...