OpenGate Capital Closes Golden Guernsey Dairy Business

Tue Jan 8, 2013 8:15pm EST

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LOS ANGELES--(Business Wire)--
OpenGate Capital, LLC, a private investment and acquisition firm, announced
today that one of its portfolio companies, Waukesha, Wisconsin-based milk
processor Golden Guernsey, LLC, has filed for Chapter 7 bankruptcy in Delaware
bankruptcy court. This action follows the closing of Golden Guernsey`s facility
on January 5th. 

OpenGate Capital acquired Golden Guernsey in September 2011 from Dean Foods
after the United States Department of Justice required Dean Foods to sell the
business in order to resolve antitrust concerns that Dean Foods` share of the
school milk supply business was too large. 

When OpenGate Capital acquired Golden Guernsey the acquisition terms included an
exclusive and fixed-price milk supply agreement, and the assumption of a legacy
union contract. During the investment period, OpenGate Capital and its
management team successfully implemented new sales and operations strategies
which created a seamless transition of Golden Guernsey from the former owner`s
organization and yielded an increase in sales of 20 percent However, as Golden
Guernsey was suffering under the pressure to meet demands for lower cost
products, it was unable to successfully reduce its expenses in a way to achieve
a state of financial viability given some of its legacy relationships. 

Since being acquired by OpenGate Capital, Golden Guernsey made vigorous efforts
to reduce its expenses through discussions with its various suppliers, vendors,
and the labor union. The prospect of closing the plant and the potential for
bankruptcy was raised on several occasions with these groups, all of which were
provided with a clear picture of Golden Guernsey`s fragile financial condition.
Despite this, Golden Guernsey`s efforts were rejected, leading to the closure of
the business. 

Andrew Nikou, OpenGate Capital`s CEO, stated, "We have to make realistic
decisions about our investments, and the reality is that the Golden Guernsey
business was unable to achieve financial autonomy given the pressure to lower
prices and seemingly non-negotiable operating expenses. This was a very
difficult decision given the loss of jobs and disruption to milk delivery
service, yet it had to be made. The closure of the plant is not a reflection of
the hard work contributed by the Golden Guernsey family of employees.
Unfortunately, when expenses overwhelm revenue for too long, and we are unable
to achieve cooperation from the people with whom we do business, the business
cannot be sustained." 

About OpenGate Capital

OpenGate Capital, LLC is a global private investment firm specializing in the
acquisition and operation of businesses seeking revitalization through growth
and operational improvements. Established in 2005, OpenGate Capital is
headquartered in Los Angeles, California and maintains offices in Paris, France
and São Paulo, Brazil. OpenGate`s seasoned professionals possess the critical
skills needed to acquire, transition, operate and build successful businesses.
To date, OpenGate Capital has executed more than 20 transactions ranging from
corporate divestitures to turnaround acquisitions, industry consolidations and
other special situation investments. The OpenGate portfolio of wholly owned
businesses generates nearly $2 billion in revenue and includes businesses from a
wide range of industries and geographic markets. For more information, please
visit www.opengatecapital.com.

OpenGate Capital Business Development Contact:
Joshua Adams
Email: jadams@opengatecapital.com
Telephone: 1 (310) 432-7000
or
OpenGate Capital Media Contact:
Alanna Chaffin
Email: achaffin@opengatecapital.com
Telephone: 1 (310) 432-7060 

Copyright Business Wire 2013