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$1.5 Billion US Dairy Deal Completed

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$1.5 Billion US Dairy Deal Completed

$1.5 Billion US Dairy Deal Completed
January 04
11:48 2013

Dean Foods, one of leading food and beverage companies in the United States, has completed the sale of its Morningstar Foods division to Canadian dairy group Saputo for $1.45 billion.  Morningstar Foods is a leading manufacturer of dairy and non-dairy extended shelf-life and cultured products, including creams and creamers, ice cream mixes, whipping cream, aerosol whipped toppings, iced coffee, half and half, value-added milks, sour cream and cottage cheese. The transaction includes the operations of Morningstar Foods including approximately 2,000 employees and 10 manufacturing facilities in 9 states.

Gregg Tanner, chief executive of Dean Foods, says: “Dean Foods will use substantially all of the net proceeds from the sale of Morningstar to significantly reduce outstanding debt, resulting in a stronger balance sheet and increased flexibility to execute against our strategies for our core dairy business.” As a result of this transaction, Dean Foods expects to realise approximately $887 million in proceeds, net of taxes and expenses.

The acquisition of Morningstar will complement the activities of the Saputo Dairy Products Division (USA). Through this acquisition, Saputo will benefit from Morningstar’s national manufacturing and distribution footprint and will optimise coast-to-coast service. This transaction will expand product offering to customers in the United States and broaden the range of Saputo’s future acquisition opportunities. The net purchase price represents for Saputo. a multiple of 7.9x Morningstar’s EBITDA.

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.


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