Dean Foods Sells Dairy Business
In early November, Dean Foods Inc. (NYSE: DF) said that it was going to look for a buyer for the company's Morningstar wholesale delivery dairy business. That search ended this morning with the announcement that Canadian food processor Saputo Inc. has acquired the Morningstar business for $1.45 billion.
This is the second major trimming at Dean, which spun off another division into The WhiteWave Foods Co. (NYSE: WWAV) in late October.
The net proceeds from the sale are expected to total $887 million, which the company said it will use to "retire outstanding term debt under its senior secured credit facility." At the end of September, Dean listed long-term debt as totaling $3.24 billion.
WhiteWave will receive $60 million after 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." Dean owns 87% of WhiteWave.
The transaction is expected to close late this year or early in the first quarter of 2013, subject to the usual closing conditions and regulatory approvals.
Shares of Dean Foods are up 5% in premarket trading this morning, at $18.00 in a 52-week range of $10.12 to $19.17. Shares of WhiteWave are up 1.3% at $15.37 in a post-IPO range of $14.22 to $19.17.
Filed under: 24/7 Wall St. Wire, Food, International Markets, Mergers & Acquisitions Tagged: DF, WWAV