Agropur to acquire Davisco’s dairy processing assets

Canadian dairy cooperative Agropur has signed an agreement to acquire US-based Davisco Foods International’s dairy processing assets, for an undisclosed amount.

The deal is expected to increase Agropur’s global milk intake by 50%, along with doubling its processing operations in the US.

Davisco, which is based in Le Sueur, Minnesota, processes around 1.7 billion litres of milk every year. It also produces about 170 million kg of cheese and 80 million kg of whey ingredients annually.

As part of the deal, Agropur will acquire Davisco’s three cheese processing facilities in Le Sueur, Jerome (Idaho) and Lake Norden (South Dakota).

The acquisition also includes an ingredients facility in Nicollet, a Friendly Confines Cheese Shoppe in Le Sueur and sales offices in Eden Prairie, Minnesota; Shanghai, China; Singapore; and Geneva, Switzerland.

In addition, the deal includes the acquisition of distribution centres located in Rotterdam, Netherlands, and Tianjin, China.

The transaction, which is subject to customary closing conditions, is expected to be complete by 1 August 2014.

Agropur president Serge Riendeau said: "With over US$1bn in annual sales, this acquisition is by far the largest transaction in Agropur’s 76 year history.

"This transaction, combined with the most recent ones in Canada, will increase our sales to over CDN$5.8bn (US$5.4bn) on an annualised basis, and we should reach 5.3 billion litres (12.1 billion pounds) of milk processed each year in 41 plants across North America."

Davisco CEO Jon Davis said: "Davisco and Agropur have built, over 70 years, very similar cultures. Along with all of Davisco’s management team, I look forward to becoming part of the Agropur family and I am very excited about what the future holds."

With its 32 plants, Agropur processes around 3.4 billion litres of milk per year. It also produces brands such as Natrel, Québon, OKA, Farmers, Central Dairies, Sealtest and Island Farms.