Agropur, Canada’s largest dairy cooperative, and Davisco Foods International, a US-based cheese and dairy ingredients company, have entered into an agreement for Agropur to acquire the dairy processing assets of Davisco.
The acquisition is targeted to close August 1, 2014, subject to satisfaction of customary closing conditions. This transaction will double Agropur’s US processing operations and will increase its global milk intake by 50%. It will also strengthen its position in the North American and international dairy industries.
“With over US $1 billion in annual sales, this acquisition is by far the largest transaction in Agropur’s 76-year history,” said Serge Riendeau, president of Agropur. “This transaction, combined with the most recent ones in Canada, will increase our sales to over CDN $5.8 billion (US$5.4 billion) on an annualized basis, and we should reach 5.3 billion liters (12.1 billion pounds) of milk processed each year in 41 plants across North America. As a result of this acquisition, the US operations of Agropur should reach the top five cheese and ingredients processors in the United States to even better serve its clients.”
Headquartered in Le Sueur MN, Davisco processes 1.7 billion liters (3.8 billion pounds) of milk annually and has 900 employees.
The acquisition includes three Davisco cheese processing factories in Le Sueur, Jerome ID, and Lake Norden SD. It also includes an ingredients plant in Nicollet MN and a Friendly Confines Cheese Shoppe in Le Sueur. Also included are sales offices in Eden Prairie MN (North America sales office), Shanghai (China sales office), Singapore (Southeast Asia sales office) and Geneva, Switzerland (Europe sales office); and distribution centers in Rotterdam, Netherlands; and Tianjin, China.
Davisco produces more than 170 million kg (375 million pounds) of cheese and 80 million kg (180 million pounds) of whey ingredients annually.
Agropur will finance the total consideration from existing cash resources and new credit facilities fully underwritten by the Co-Lead Arrangers and Joint Bookrunners Desjardins Capital Markets, BMO Capital Markets, and Rabobank.
Access www.agropur.com or www.daviscofoods.com for more information.