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Saputo to Acquire Dean's Morningstar


Saputo Inc. and Dean Foods announced an agreement in which Canadian-based Saputo will acquire Dean’s subsidiary, Morningstar Foods, LLC for $1.45 billion. The transaction is anticipated to close in late 2012 or early in the first quarter of 2013. 
Morningstar produces a variety of dairy and non-dairy extended shelf-life (ESL) products, as well as cultured products, under a wide array of private labels and owned brands. It has approximately 2,000 employees and operates 10 manufacturing facilities located in nine states. According to a Saputo press release, the acquisition of Morningstar will complement the activities of the Saputo Dairy Products Division (USA). 
As a result of this transaction, Dean Foods expects to realize $887 million ($ U.S.) in proceeds, net of taxes and expenses. It expects to use all net proceeds to retire outstanding term debt.
As a condition of the sale, Dean also entered into an agreement with The WhiteWave Foods Company, a controlled subsidiary, whereby WhiteWave will receive $60 million net of taxes as consideration for the termination of an option to purchase plant capacity and property at a Morningstar facility, and the sale to Morningstar of certain manufacturing equipment located at another Morningstar plant.