Saputo, Dean complete Morningstar Foods transaction
Sources: Saputo, Dean Foods
Saputo Inc. completed the transaction to acquire Morningstar Foods, LLC, a subsidiary of Dean Foods Company, on Jan. 3, one month to the day after the agreement was announced. The purchase price of $1.45 billion ($ US) was financed through a combination of $250 million in available cash and a new bank loan of $1.2 billion.
Morningstar has about $1.6 billion ($ Canadian) in annual revenues, approximately 2,000 employees and operates 10 manufacturing facilities located in nine states. The combined business will have approximately 12,000 employees, 57 manufacturing facilities in five countries and combined annual revenues of approximately $8.6 billion ($ Canadian). The acquisition of Morningstar complements the activities of the Saputo Dairy Products Division (USA).
Morningstar produces a variety of dairy and non-dairy extended shelf-life (“ESL”) products, including creams and creamers, ice cream mixes, whipping cream, aerosol whipped toppings, iced coffee, half and half and value-added milks, as well as cultured products such as sour cream and cottage cheese. The products are manufactured under a wide array of private labels and owned brands, and are sold nationwide through an internal sales force and independent brokers. Morningstar serves the needs of retailers, national quick-serve restaurant chains, grocery stores, mass merchandisers and distributors across the United States.
As a result of this transaction, Dean expects to realize approximately $887 million ($ US) in proceeds, net of taxes and expenses. The company plans to use all net proceeds toward fully retiring its remaining senior secured term debt, significantly lowering its leverage and increasing its financial flexibility.
Dean Foods also completed the previously announced transaction with The WhiteWave Foods Company, another of its controlled subsidiaries, whereby WhiteWave received $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.
Saputo produces, markets, and distributes a wide array of products, including cheese, fluid milk, yogurt, dairy ingredients and snack-cakes. Saputo is the 12th largest dairy processor in the world, the largest in Canada, the third largest in Argentina and among the top three cheese producers in the United States. Products are sold in more than 50 countries under the following brand names: Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, Dragone, DuVillage 1860, Frigo Cheese Heads, Great Midwest, King’s Choice, Kingsey, La Paulina, Neilson, Nutrilait, Ricrem, Salemville, Stella, Treasure Cave, hop & go, Rondeau and Vachon. For more information, visit www.saputo.com
About Dean Foods Dean Foods is a leading food and beverage company in the United States. The Company's Fresh Dairy Direct segment is the nation's largest processor and direct-to-store distributor of fluid milk marketed under more than 50 local and regional dairy brands and private labels. Fresh Dairy Direct also distributes ice cream, cultured products, juices, teas, bottled water and other products. Dean also holds a majority interest in The WhiteWave Foods Company, which produces and sells an array of nationally and internationally branded plant-based foods and beverages, coffee creamers and beverages, and premium dairy products. WhiteWave brands - including Silk®, Horizon Organic®, International Delight®, and LAND O LAKES® - are category leaders and consumer favorites. Alpro is the pan-European leader in branded soy food and beverage products with the Alpro® soya and Provamel® brands. For more information, visit www.deanfoods.com.