Saputo to buy U.S. dairy supplier Morningstar for $1.45B
The Canadian Press
Published Monday, December 3, 2012 9:22AM EST
Last Updated Monday, December 3, 2012 10:03AM EST
MONTREAL -- Canadian cheese maker Saputo Inc. (TSX:SAP) will pay US$1.45 billion to buy Morningstar Foods, a U.S. company that makes a variety of dairy and non-dairy products such as creams, ice cream mixes, sour cream and cottage cheese.
"Through this acquisition, Saputo will benefit from Morningstar's national manufacturing and distribution footprint and will optimize coast-to-coast service," Saputo said in a statement
"This transaction will expand product offering to customers in the United States and broaden the range of Saputo's future acquisition opportunities."
Morningstar has about 2,000 employees and 10 manufacturing plants in the United States. It had the equivalent of C$1.6 billion in revenue during the 12 months ended September.
By comparison, Montreal-based Saputo (TSX:SAP) had about $1.7 billion of revenue in its second quarter alone from cheese, dairy and bakery operations in Canada, the United States and other countries.
Saputo has said it plans to expand in the United States but has downplayed speculation it might acquire the assets of the bankrupt company that makes Twinkies snack cakes.
Following the Morningstar acquisition, Saputo will have about 12,000 employees and 57 manufacturing plants in five countries.
Morningstar is currently a subsidiary of Dean Foods (NYSE:DF), which said in a separate statement from Dallas that it expects to receive US$887 million from the sale after taxes and expenses.
It said the money would be used to reduce Dean's debts.
"Morningstar is an attractive business and we believe that it will continue to grow and thrive in Saputo's portfolio," said Gregg Engles, chairman of Dean Foods.
"I'd like to personally thank the Morningstar team for their contributions to Dean Foods over the past 15 years and wish them well as they move forward under new ownership."