Dean Foods closes $425m deal with DFA

US-based dairy company Dean Foods has completed the sale of most of its assets, as well as rights, interests and properties, relating to 44 of its fluid and frozen facilities to subsidiaries of Dairy Farmers of America (DFA).

In February, DFA agreed to purchase a significant part of Dean Foods for $425m in a stalking horse bid.

The two companies have been in negotiations since Dean Foods announced it would begin voluntary Chapter 11 re-organisation.

Dean Foods president and CEO Eric Beringause said: “We are pleased to complete these transactions, which maximise value for our stakeholders and will enable substantially all of our businesses to continue operating and serving customers across the country.

“Our team has put in considerable work over the last several months to find the right partners for our assets that would enable them to continue to succeed while preserving the most jobs possible and to ensure a smooth transition for our customers and partners.

“The completion of these sales is a testament to our employees’ efforts. I also want to thank our entire team for their commitment and dedication to Dean Foods not only over the last several months but over the past several years.”

Additionally, Dean Foods announced it completed the divesture of the assets, rights, interests and properties associated with eight facilities, as well as two distribution branches and certain other assets to Prairie Farms Dairy.

It also divested facility in Reno, Nevada as well as its ‘Berkeley Farms’ trademark and its related intellectual property to Producers Dairy Foods.

As part of the US Department of Justice’s (DOJ) approval of Dean Foods’ deal with DFA, the latter has entered into a Consent Decree with the DOJ under which DFA has committed to holding separate and ultimately divest the dairy processing plants located in DePere of Wisconsin, Franklin of Massachusetts, and Harvard of Illinois along with some assets associated with the operations at each facility.

Upon deal completion, Beringause also stepped down as president and CEO of the company.

For this transaction, Davis Polk & Wardwell and Norton Rose Fulbright served as the legal advisors to Dean Foods, while Evercore acted as its investment banker and Alvarez & Marsal as its financial advisor.