WhiteWave (WWAV) Acquisition by Danone a "Hand and Glove Fit" CEO Tells CNBC
NEW YORK (TheStreet) -- France's Danone (DANOY) will double the size of its business in the U.S. by acquiring organic food producer WhiteWave (WWAV) for $12.5 billion, Danone's largest acquisition since 2007, CNBC's Sara Eisen reported on "Squawk on the Street" Friday morning.
Danone chose to acquire WhiteWave as both companies share a mutual goal to provide healthier ways of eating and drinking, Danone CEO Emmanuel Faber told CNBC.
WhiteWave has long been a target for acquisition by many companies including Kellogg (K), Campbell Soup (CPB), Pepsi (PEP), and Coca-Cola (KO).
"Danone is just an extraordinary fit for us," WhiteWave CEO Gregg Engles told CNBC.
The companies have similar manufacturing technology and footprints that result in complementary business strategies.
"Very much aligned from a philosophical perspective, culturally in terms of how our people work, how they think about the consumer, how they think about their responsibilities and also from an industrial perspective. We are very much a hand and glove fit," Engles said.
Danone is acquiring WhiteWave for 2.7 times Whitewave's 2017 sales, 21 times EBITDA, and $56.25 per share, which is 24% more than Whitewave's 30-day average closing price.
"It is truly a unique opportunity for WhiteWave shareholders and yet a compelling transaction for Danone's transformation in the very long term," Faber said.
Danone hopes to push WhiteWave's portfolio into its own distribution through its large presence in countries across the globe, Faber added.
Shares of WhiteWave closed up by 0.73% to $56.64 this afternoon.
Separately, TheStreet Ratings team set this stock as a "buy" with a ratings score of B. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, expanding profit margins, notable return on equity and compelling growth in net income. TheStreet Ratings team feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
You can view the full analysis from the report here: WWAV