Saputo to purchase Scotsburn fluid milk business for $61m

Canadian dairy products maker Saputo has entered into an agreement with Scotsburn Co-Operative Services, in a move to acquire the latter’s fluid milk activities for around $61m.

The move is part of the company’s strategy to expand its presence in Atlantic Canada.

Scotsburn operates two fluid milk processing plants in Sydney, Nova Scotia, and Mount Pearl, Newfoundland, and employs around 400 people.

It manufactures and distributes dairy and creamery products, including fluid milk, frozen desserts, cultured products, butter, fruit and squirt drinks, and spring water, as well as ice creams, frozen yogurts, sherbets and novelties in Canada and across the globe.

The deal is expected to be completed in March 2014, following approval from Scotsburn co-op members and usual conditions, including approval by the Canadian Competition Bureau.

According to the company, the debt-free purchase will not include about $8m of working capital items, and is payable in cash by drawing on available credit lines.

The Scotsburn fluid milk business records around $160m in annual sales and about $8m of earnings before interest, taxes, depreciation and amortization (EBITDA).

Saputo produces, markets and distributes dairy and bakery products. It operates in two segments, Dairy Products and Grocery Products.

The company offers a range of cheeses, such as Italian cheeses, cheddar and speciality and fine cheeses; dairy products, including fluid milk, flavoured milk, evaporated milk, cream, yogurt, butter, sour cream, milk powder, cottage cheese, functional milks, ice cream mixes, and value-added and organic products; and non-dairy products comprising flavoured coffee creamers, juices, and drinks.