That’s a lot of green!
The months-long auction for bagged salad grower Earthbound Farm Organic is a bust after potential buyers balked at the rich asking price, The Post has learned.
In May, private-equity owner Kainos Capital hired Barclays to shop the San Juan Bautista, Calif.-based produce company for north of $600 million.
The price tag worked out to 8.5 times the company’s $75 million in annual earnings before interest, taxes, depreciation and amortization. Suitors thought 7.5 times was more reasonable, a source close to the situation said.
Based on sales of other organic brands, Kainos probably figured it could get top dollar even though consumers are reluctant to pay premium prices for perishable produce items like lettuce — organic or otherwise.
“They are trying to be a value-added business, but people see it as produce,” one source said.
At the same time, Earthbound, which was the first to sell pre-washed bagged salad in stores, is competing with a growing number of organic produce suppliers.
After canceling the sale, Earthbound would be better off consolidating the salad space by buying smaller competitors along with diversifying its offerings, a source said.
Besides salads, Earthbound offers fruits, dried fruits and snack mixes.
An Earthbound spokeswoman did not return calls.