MONTREAL -- Saputo Inc. has signed an agreement to acquire Morningstar Foods LLC, a subsidiary of Dean Foods Co, for $1.45 billion. Morningstar Foods--not to be confused with vegetarian food brand Morningstar Farms--produces a variety of dairy and nondairy extended shelf-life (ESL) products, including creams and creamers, ice cream mixes, whipping cream, aerosol whipped toppings, iced coffee, half and half, value-added milks, as well as cultured products such as sour cream and cottage cheese.
These 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.
Morningstar has approximately 2,000 employees and operates 10 manufacturing facilities located in nine states.
Saputo said that it expects the deal to close by the end of December 2012.
The combined business will have approximately 12,000 employees and 57 manufacturing facilities in five countries.
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 optimize 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 agreement has been approved by the company's board.
Gregg Engles, chairman of Dallas-based Dean Foods, said, "Morningstar is an attractive business, and we believe that it will continue to grow and thrive in Saputo's portfolio. Today, Morningstar has substantial potential for accelerating growth through new distribution channels and new product categories. … By joining Saputo, we believe Morningstar will be well positioned for continuing success and future growth."
As a condition of the sale, Dean Foods also entered into an agreement with The WhiteWave Foods Co., a controlled subsidiary of the company, 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. Also, WhiteWave and Morningstar agreed to modify certain terms of existing intercompany commercial agreements between the two companies.
Dean Foods is a leading food and beverage company in the United States. Its Fresh Dairy Direct segment is one of the nation's largest processors and direct-to-store distributors 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. Morningstar Foods is a leading warehouse delivery dairy business that produces and sells traditional and specialty dairy items, including cultured dairy products, ice cream mixes, coffee creamers, aerosol whipped toppings, traditional and value-added milks, and blended iced beverages to retailers and foodservice providers nationwide. Dean Foods also holds a majority interest in The WhiteWave Foods, 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 include Silk, Horizon Organic, International Delight and Land O Lakes in the United States.
Montreal-based Saputo produces, markets, and distributes a wide array of products of the utmost quality, including cheese, fluid milk, yogurt, dairy ingredients and snack-cakes. Its products are sold in more than 50 countries under brands such as 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.
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