Dairy Farmers of America (DFA) has been named the winning bidder to acquire a substantial portion of Dean Foods’ business operations in its Chapter 11 bankruptcy process, Dean Foods announced March 31.
Pursuant to the agreement, which is subject to final approval by the bankruptcy court, DFA will acquire the assets, rights, interests and properties related to 44 of the company’s fluid and frozen facilities for $433 million, up from the $425 million deal the companies made in February but decided to forego in order to avoid unnecessary litigation regarding procedure and bid protections for DFA.
In addition, as part of the court-supervised sale process, Dean Foods has designated Prairie Farms Dairy as the winner of the assets, rights, interests and properties related to eight additional facilities, two distribution branches and certain other assets for $75 million in cash. Dean Foods has designated Mana Saves McArthur LLC and Producers Dairy Foods as winning bidders for the sale of the facilities located in Miami, Fla., and Reno, Nev., respectively. Harmoni Inc. has been 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,” Dean Foods president and chief executive officer Eric Beringause 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.”
Beringause said the company is committed to completing these transactions as quickly as possible and to ensuring a smooth transition for 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,” he said.
Dean Foods separately announced that it reached an agreement in principle for Industrial Realty Group LLC to buy its 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 related to Dean Foods’ facilities in Hilo and Honolulu, Hawaii. 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.”
The 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 court approval, the transactions are expected to close at the end of April 2020.
Additional information is available on the restructuring page of the company’s website, DeanFoodsRestructuring.com. In addition, court filings and other information related to the proceedings are available on a separate website administered by the company’s claims agent, Epiq Bankruptcy Solutions LLC, at https://dm.epiq11.com/case/southernfoods/dockets.