Reuters logo
UPDATE 2-Dean Foods to buy European soy products business
June 15, 2009 / 12:07 PM / 8 years ago

UPDATE 2-Dean Foods to buy European soy products business

* Agrees to buy Alpro for 325 mln euros

* Deal to add modestly to 2009 earnings exc. costs

* Dean shares fall 2 percent (Adds company comments, stock activity, background; changes dateline from NEW YORK)

CHICAGO, June 15 (Reuters) - Dean Foods Co (DF.N) said on Monday it plans to pay 325 million euros ($450 million) to buy Belgium’s Vandemoortele N.V.’s Alpro unit, a soy business it had targeted for seven years that only recently became available.

The deal would give Dean a foothold in the market for soy drinks and food in Europe.

Dean Foods, the largest U.S. dairy company, became a major player in the soy category in 2002 when it bought White Wave Inc., the maker of Silk soymilk.

“We have quietly pursued Alpro since we acquired Silk in 2002. We frankly did not believe it would ever become available,” Dean Foods Chairman and Chief Executive Gregg Engles told analysts on a conference call.

He hinted that the deal came about as privately held Vandemoortele dealt with the global financial crisis.

“The availability of credit, or lack thereof, was an important aspect in the seller’s decision to sell this property,” Engles said.

Dean, whose other products include Horizon Organic milk, said it is financing the deal under its existing revolving credit line. It expects the acquisition to be completed in the third quarter and add modestly to 2009 earnings, excluding costs tied to the deal.

Alpro has two soy product brands: a namesake one for retail and Provamel, which targets the specialized health channel with organic products.

Alpro’s revenue nearly tripled from 2000 through 2008, when it hit 260 million euros. About two-thirds of Alpro’s business is in beverages. It also makes yogurt, dessert, meat alternatives and other products.

Dean plans to run Alpro as a separate European business, with Alpro CEO Bernard Deryckere reporting to the CEO and president of Dean’s WhiteWave-Morningstar division, Joe Scalzo.

While soy product sales are growing in Alpro’s core markets, the category is still not mainstream and has relatively low household penetration, Scalzo said.

He said Dean could bring Alpro’s expertise in products such as yogurt and dessert into its Silk business in North America.

The company did not rule out future acquisitions to expand into new countries, but noted that any potential deal in the soy category would be very small compared with Alpro.

Dean’s shares fell 2 percent to $18.18 in morning trade.

Last month, Dean made an offering of 22.5 million common shares to repay debt. On Monday, the company said it would not raise additional equity as a result of the Alpro deal and is still committed to cutting its funded debt to less than 3.5 times earnings before interest, tax, depreciation and amortization. (With reporting by Aarthi Sivaraman in New York; Editing by Derek Caney, Dave Zimmerman)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below