A U.S. bankruptcy court approved last week the sale of all assets of dairy conglomerate Dean Foods, including a $433 million acquisition of properties by national cooperative Dairy Farmers of America (DFA). The decision comes roughly five months after Dean, at the time the largest dairy producer in the country, filed for Chapter 11 bankruptcy protection.
In February, DFA announced it had reached an agreement to acquire a substantial portion of Dean’s assets, including 44 of its 57 liquid and frozen facilities, real estate, inventory, equipment, parts of its direct store delivery system and other corporate assets, for a base sum of $425 million. However, the cooperative was dropped as the stalking horse bidder for Dean last month after a group of creditors filed opposition in court against the deal.
In a statement sent to BevNET, DFA EVP and chief of staff Monica Massey said that the approval of the cooperative’s bid followed “many months of uncertainty regarding the future of Dean Foods” and that the final closing is contingent upon approval by the U.S. Department of Justice and the finalization of collective bargaining agreements with multiple unions.
“Throughout this process, our main focus has always been, and continues to be, on maintaining milk markets and limiting disruption to the industry,” Massey said. “If approved, the purchase of these assets will be critical to our mission of delivering value to our family farm-owners, preserve nearly 12,000 jobs and ensure fresh dairy is available to consumers across the country.”
In addition to the DFA agreement, the court also approved the sales of eight facilities and two distribution branches to Prairie Farms Dairy for $75 million and a facility in Miami, Florida to Mana Saves McArthur, LLC for $16.5 million. California-based Producers Dairy Foods was approved to purchase Dean’s Reno, Nevada facility for $3.7 million as well as the intellectual property rights to the Berkeley Farms brand for $3 million. Texas-based Industrial Realty Group, LLC was granted the right to acquire Dean’s Meadow Gold Hawaii business — which produces brands such as TruMoo, Dairy Pure and POG juice in the Aloha State — for $25.5 million.
As well, juice brand Uncle Matt’s Organics, which Dean acquired for an undisclosed sum in 2017, will be sold to Harmoni, Inc. for $7.25 million. According to IRI, the brand’s orange juice business reported over $12 million in retail dollar sales for the 52-week period ending February 23, up 31.6%, making it one of only a handful of orange juice brands showing double digit growth. Its lemonade business reported an additional $2.7 million in dollar sales in the same period.
“We are confident that, under these new owners, our customers can expect the same commitment to quality and service that Dean Foods has lived up to over the years,” said Dean Foods president and CEO Eric Beringause in a press release. “We will continue to provide an uninterrupted supply of high-quality dairy products as we work towards completing these transactions. We appreciate the continued hard work and commitment of our Dean Foods employees throughout this process.”
With the sales moving forward, Dean has also begun closing certain facilities. Louisville Business First reported Sunday that the company is currently shutting down a location in Louisville, Kentucky and will begin laying off workers on April 16.
The announcement also follows reports last week that CROPP Cooperative — a dairy group which includes Organic Prairie, Organic Valley and Mighty Organic — will dissolve the joint venture it entered with Dean in 2017. In a tweet posted in November, Organic Valley noted that the partnership only accounted for “a small fraction” of the company’s milk sales.
According to the release, Dean anticipates all transactions will be completed by early May, pending final regulatory approvals.