Alvarez & Marsal served as financial advisor to Dean Foods during the company’s sale process and auction as part of its Chapter 11 process. Dairy Farmers of America was named the winning bidder to acquire a substantial portion of Dean Foods’ business operations. Pursuant to the agreement, which is subject to final approval by the bankruptcy court, Dairy Farmers of America will acquire the assets, rights, interests and properties relating to 44 of Dean Foods’ fluid and frozen facilities for $433 million.
In addition, as part of the court-supervised sale process, Dean Foods designated Prairie Farms Dairy as the winner of the assets, rights, interests and properties relating to eight additional facilities, two distribution branches and certain other assets for $75 million in cash. Dean Foods also designated Mana Saves McArthur and Producers Dairy Foods as winning bidders for the sale of the facilities located in Miami and Reno, NV, respectively. Harmoni was designated as the winning bidder for the Uncle Matt’s business.
“We ran a competitive auction process and are pleased to have reached these agreements, which we believe represent the best path forward for our stakeholders,” Eric Beringause, president and CEO of Dean Foods, said. “Dean Foods has strong and long-standing relationships with DFA and Prairie Farms Dairy. We are pleased that through these transactions, substantially all of our processing assets will continue to operate as dairies and will be owned by our dairy farmer partners with the resources, experience and industry expertise to continue to succeed in the current market environment. We are committed to completing these transactions as quickly as possible, and to ensuring a smooth transition for our customers. I want to thank all Dean Foods employees for their continued commitment to our customers and our company throughout this process. I know we can count on them to continue to deliver the high-quality dairy products our customers rely on as we work to close these transactions.”
These agreements were reached following an auction conducted under the supervision of the U.S. Bankruptcy Court for the Southern District of Texas. All agreements are subject to court approval and certain other closing conditions. A hearing to seek required court approvals is scheduled for April 3, 2020. Subject to Bankruptcy Court approval, the transactions are expected to close at the end of April 2020.
In addition, Dean Foods reached an agreement in principle under which Industrial Realty Group will buy Dean Foods’ Meadow Gold Hawaii operations as an ongoing business. Pursuant to the agreement, which is subject to final approval by the Bankruptcy Court, Industrial Realty Group will acquire the assets, rights, interests and properties relating to Dean Foods’ Hilo and Honolulu facilities. Industrial Realty Group will be partnering with 8 Cow Dairies, a Hawaii-based company, to manage operations.
“We are pleased to have reached an agreement in principle for our Meadow Gold Hawaii facilities and that Industrial Realty Group intends to continue these facilities on an ongoing basis,” Beringause said. “We are committed to completing this transaction, and our previously announced sales, as quickly as possible, and we thank all of our employees for their continued patience, hard work and dedication.”
Davis Polk & Wardwell and Norton Rose Fulbright served as legal advisors to Dean Foods and Evercore served as investment banker.
Dean Foods is a food and beverage company and a processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States.