Tuesday, 31 March 2020

Dean Foods Announces Dairy Farmers of America as Winning Bidder for Substantially All of Its Assets

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Tuesday, 31 March 2020

Prairie Farms Dairy, Mana Saves McArthur, LLC, Producers Dairy Foods and Harmoni, Inc. to Purchase Additional Assets as Part of Court-Supervised Auction
 

Court Hearing to Approve Transactions Scheduled for April 3, 2020
 

DALLAS–(BUSINESS WIRE)–Dean Foods Company (“Dean Foods” or the “Company”) today announced that, following a comprehensive sale process and a competitive auction as part of its Chapter 11 process, Dairy Farmers of America (“DFA”) has been named the winning bidder to acquire a substantial portion of Dean Foods’ business operations. Pursuant to the agreement, which is subject to final approval by the Bankruptcy Court, DFA will acquire the assets, rights, interests, and properties relating to 44 of the Company’s fluid and frozen facilities for $433 million.

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 relating to 8 additional facilities, 2 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, Florida and Reno, Nevada, 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,” said Eric Beringause, President and Chief Executive Officer of Dean Foods. “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. We are committed to completing these transactions as quickly as possible, and to ensuring a smooth transition for our 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.”

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 Bankruptcy 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, www.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, or by calling Epiq representatives toll-free at 1-833-935-1362 or 1-503-597-7660 for calls originating outside of the U.S.

A list of entities included in each transaction is available at www.DeanFoodsRestructuring.com.

Davis Polk & Wardwell LLP and Norton Rose Fulbright are serving as legal advisors to the Company, Evercore is serving as its investment banker and Alvarez & Marsal is serving as its financial advisor.

About Dean Foods

Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, the country’s first and largest fresh, national white milk brand, and TruMoo®, the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena®, Berkeley Farms®, Country Fresh®, Dean’s®, Friendly’s®, Garelick Farms®, LAND O LAKES®* milk and cultured products, Lehigh Valley Dairy Farms®, Mayfield®, McArthur®, Meadow Gold®, Oak Farms®, PET®**, T.G. Lee®, Tuscan® and more. Dean Foods also has a joint venture with Organic Valley®, distributing fresh organic products to local retailers. In all, Dean Foods has more than 50 national, regional and local dairy brands as well as private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Approximately 15,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.

*The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license.

**PET is a trademark used by license.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes, targets or anticipates will or may occur in the future are forward-looking statements. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which could include the following: risks and uncertainties relating to the Company’s Chapter 11 cases (the “Chapter 11 Case”), including but not limited to, the Company’s ability to obtain bankruptcy court approval with respect to motions in the Chapter 11 Case, the Company’s ability to consummate the planned sale of the business pursuant to the Chapter 11 Case and, if consummated, to obtain an adequate price, the effects of the Chapter 11 Case on the Company and on the interests of various constituents, bankruptcy court rulings in the Chapter 11 Case and the outcome of the Chapter 11 Case in general, the length of time the Company will operate under the Chapter 11 Case, risks associated with third-party motions in the Chapter 11 Case, the potential adverse effects of the Chapter 11 Case on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; the conditions to which the Company’s debtor-in-possession financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; the consequences of the acceleration of our debt obligations; as well as other risk factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Additionally, there can be no assurances that the sales of assets will receive regulatory approval or that any sale will be successfully consummated. The Company therefore cautions readers against relying on these forward-looking statements. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based except as required by law.

Contacts

Investor Relations
+1 214-303-3438.

Media
+1 214-721-7766
media@deanfoods.com

Michael Freitag / Viveca Tress / Lucas Pers
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449

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