Canadian dairy-products giant Saputo Inc. (SAP.T) said Monday
that it has agreed to buy Dean Foods Co.'s (DF) Morningstar
division for $1.45 billion, boosting its product offerings in the
U.S. and giving it a broader platform for growth.
Montreal-based Saputo said Morningstar makes a wide range of
dairy and non-dairy extended shelf-life products, from cream and
milk products to aerosol-whipped toppings and cultured products
like sour cream. The purchase of Morningstar, whose products are
sold throughout the U.S., will add about 2,000 employees and 10
manufacturing plants. The division's revenue came to about 1.6
billion Canadian dollars ($1.61 billion) in the 12 months to Sept.
30, Saputo said.
The company said the purchase--which is being financed through a
newly committed bank loan--will boost its bottom line immediately
after the deal closes.
Saputo said that, on a pro forma basis, the combined operations
would have had revenue of about C$8.6 billion and net earnings of
about C$563 million in the 12 months to Sept. 30. The combined
business will have about 12,000 employees and 57 manufacturing
plants in five countries.
In addition to Canada and the U.S., Saputo has facilities in
Argentina, the U.K. and Germany.
Dean Foods said separately that it will use the proceeds from
the Morningstar sale to cut debt.
Write to Carolyn King at carolyn.m.king@dowjones.com
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