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By Olivia Oran and Soyoung Kim
May 6 (Reuters) - Earthbound Farm Organic, the largestgrower of organic produce in the United States, is exploring asale of the company, according to four sources familiar with thematter.
The San Juan Bautista, California-based company, whoseinvestors include private equity firm Kainos Capital, has hiredBarclays to sell the company in a deal that could beworth $600 million to $700 million, the sources said on Monday.
The sale process is in the early stages, the sources said.The company has roughly $75 million in annual earnings beforeinterest, taxes, depreciation and amortization (EBITDA), thesources said.
In 2012, revenue topped $460 million, according to Moody's.
Fresh produce is typically regarded as a lower-marginbusiness compared with processed foods because fresh goods areperishable and have high distribution costs.
However, recent deals in the organic foods sector havecommanded high multiples. In July 2012, high-end juice makerBolthouse Foods was acquired by Campbell Soup Co for$1.6 billion, about 11 times EBITDA.
That compares with a multiple of around 9 for recenttransactions in the food and beverage sector, according toaccounting and consulting firm Grant Thornton.
Earthbound Farm and Kainos Capital could not be reached forcomment. Barclays declined to comment.
Dallas-based Kainos Capital is a new firm made up ofexecutives from HM Capital's food and consumer products group.HM Capital, a private equity firm, said last year that it waswinding down. HM Capital acquired about 70 percent of EarthboundFarm in July 2009.
Earthbound Farm grows and packages items including salads, vegetables and fruit. Founded in 1984 on a 2.5-acre backyardgarden in Carmel Valley, California, it has since expanded to26,000 acres.
The company was the first to sell pre-washed bagged salads,which are now available in 75 percent of all U.S. supermarkets,including retailers such as Costco Wholesale Corp,Walmart Stores Inc and Whole Foods Market Inc.
