Dean Foods Company announced that Dairy Farmers of America (DFA) has been named the winning bidder to acquire a substantial portion of Dean Foods’ business operation following a comprehensive sale process and a competitive auction as part of its Chapter 11 bankruptcy filing.
Under the agreement, which is subject to final approval by the Bankruptcy Court, DFA will acquire the assets, rights, interests, and properties relating to 44 of Dean’s fluid and frozen facilities for $433 million.
“After many months of uncertainty regarding the future of Dean Foods, we are pleased to have been named the accepted bidder for a large portion of Dean’s assets,” said Monica Massey, executive vice president and chief of staff, DFA. “The more than 13,500 dairy farmers who own our Cooperative, and dairy farmers across the country, will now benefit from these milk markets remaining open.”
Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States
In February, DFA agreed to pay a base purchase price of $425 million to acquire 44 of Dean's frozen and fluid facilities, real estate, equipment, inventory, and associated delivery systems. The co-ops "stalking horse" bid represented the initial bid on the assets of the Dean Foods, setting a floor price. But that offer was withdrawn on March 20.
In addition, Dean Foods has designated Prairie Farms Dairy as the winner of the assets, rights, interests, and properties relating to 8 additional facilities, 2 distribution branches and certain other assets for $75 million in cash. Dean Foods has designated Mana Saves McArthur, LLC, and Producers Dairy Foods as winning bidders for the sale of the facilities located in Miami, Florida and Reno, Nevada, respectively. Harmoni, Inc. has been designated as the winning bidder for the Uncle Matt’s business.
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“We ran a competitive auction process and are pleased to have reached these agreements, which we believe represent the best path forward for our stakeholders,” Eric Beringause, president and CEO of Dean Foods, said in a release.
“Dean Foods has strong and long-standing relationships with DFA and Prairie Farms Dairy," he added. "We are pleased that through these transactions, substantially all of our processing assets will continue to operate as dairies and will be owned by our dairy farmer partners with the resources, experience and industry expertise to continue to succeed in the current market environment. We are committed to completing these transactions as quickly as possible, and to ensuring a smooth transition for our customers."
The agreements were reached following an auction conducted under the supervision of the U.S. Bankruptcy Court for the Southern District of Texas. A hearing to seek required court approvals is scheduled for April 3, 2020. Subject to Bankruptcy Court approval, the transactions are expected to close at the end of April 2020. A list of entities included in each transaction is available at DeanFoodsRestructuring.com.
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