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DFA to Purchase “Substantial Portion” of Dean Foods
February 19, 2020
4 Min Read
American milk cooperative Dairy Farmers of America (DFA) entered into an asset purchase agreement to take on “a substantial portion” of Dean Foods business operations after the dairy products manufacturer filed for Chapter 11 reorganization last year, Dean Foods announced in a press release this week.
“We have had a relationship with DFA over the past 20 years, and we are confident in their ability to succeed in the current market and serve our customers with the same commitment to quality and service that they have come to expect,” Dean Foods Chief Executive Officer and President Eric Beringause said in a statement.
Under the terms of the deal, DFA will purchase 44 fluid and frozen facilities and associated real estate, inventory, equipment, and other assets needed to run the sites.
A Bankruptcy Court hearing is scheduled for March 12 that will determine whether DFA can be a “stalking horse bidder” for the assets using a court-supervised process. If approved, DFA can set the floor price for the sale, however other bidders can come in and offer higher or better offers. DFA said it is “looking forward to working with its bondholders and other potentially interested parties in connection with their bids.”
Other parties must submit information by March 31 to be considered as a potential bidder on the stalking horse assets. Those interested can submit a bid in the form of an asset purchase or a reorganization plan. Those interested in making a qualified bid for stalking horse assets and plants and other assets not covered under DFA’s bid have until April 13 to make an offer.
Dean Foods revealed that it was in “advanced discussions” with DFA on the possible sale of some of its assets last November. The company filed for bankruptcy after a downturn caused by weak demand for milk.
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