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Dean Foods Co. (NYSE: DF) has agreed to acquire the manufacturing and retail ice cream business (Friendly’s Ice Cream) from an affiliate of Massachusetts-based Friendly’s Ice Cream LLC (Friendly’s Restaurants), a leading ice cream and dining brand in the Northeast U.S. owned by private equity firm Sun Capital Partners since 2007, for $155 million in cash. Friendly’s Restaurants, a leading family-dining restaurant chain with over 260 locations in the U.S., will continue to be owned and operated by an affiliate of Sun Capital and will license use of the Friendly’s trademark under a license agreement entered into as part of the transaction. Friendly’s Ice Cream, with $166 million in net sales in 2015, is an iconic brand that produces popular packaged ice cream and other frozen dessert products, including single-serve sundae cups, novelty items, cakes and rolls. Friendly’s distributes these products in over 8,000 retail outlets. Products are made from high quality ingredients with an emphasis on innovative flavors and unique formulations and packaging. Founded in 1935, the brand has a rich heritage and a long history of delighting consumers. “We are thrilled at the prospects the Friendly’s Ice Cream acquisition brings to Dean Foods,” said Gregg Tanner, CEO. “Coupled with the momentum of Dean Foods’ current regional brands, the Friendly’s brand will be a catalyst in our strategy to grow our existing ice cream business and branded portfolio. Friendly’s is an ideal complement to our other heritage brands across the country and fills a manufacturing and retail ice cream void in our nationwide footprint.” Friendly’s Ice Cream’s growth momentum, strong brand presence in the Northeast U.S., and attractive financial profile, make it a compelling investment. The acquisition of Friendly’s Ice Cream is expected to be immediately accretive to margins and earnings, and Dean Foods expects that the acquisition will add approximately $0.06 earnings per share accretion in 2016. At closing, Dean Foods intends to fund the transaction with cash on hand and our existing revolving facilities. “Friendly’s ice cream strongly resonates with consumers throughout the Northeast. Very similar to the traditions shared by consumers who grew up enjoying our existing regional milk and ice cream brands, such as Mayfield or Dean’s, we believe the Friendly’s ice cream brand represents and promotes what Dean Foods has built itself around and is a great fit in our branded portfolio. Dean Foods is rooted in the traditional goodness of dairy, making Friendly’s more than just a good business and financial opportunity,” Tanner concluded. In addition to acquiring Friendly’s manufacturing and retail ice cream business, Dean Foods will acquire the Friendly’s trademark as well as all intellectual property associated with the ice cream business. The transaction is expected to close late in the second quarter of 2016, subject to regulatory approvals and other customary closing conditions. Following the close of the transaction, Friendly’s Ice Cream will continue to operate out of its facility in Wilbraham, Massachusetts, and the senior management team of Friendly’s Ice Cream will continue to lead the business. Rothschild Inc. acted as financial advisor to Dean Foods on the transaction, and Gibson Dunn provided legal support. Lazard Middle Market served as financial advisor to Friendly’s Ice Cream on the transaction, and Morgan, Lewis & Bockius was the company’s legal advisor. 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, white milk national 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, 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. 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. The company has lmost 17,000 employees across the country. Sun Capital Partners Inc. is a global private equity firm which identifies companies’ untapped potential and leverages its deep operational and financial resources to transform results. Sun Capital is a trusted partner that is recognized for its investment and operational experience, including particular expertise in the consumer products and services, food and beverage, industrial, packaging, chemical, building products, automotive, restaurant and retail sectors. Sun Capital affiliates invest in companies which typically have the number one or two market position in their industry, long-term competitive advantages, and significant barriers to entry. Sun Capital is headquartered in Boca Raton, with offices in Los Angeles and New York, and affiliates in London, Frankfurt, Stockholm and Shenzhen. Since 1995, Sun Capital has invested in more than 330 companies worldwide across a broad range of industries and transaction structures. On a consolidated basis, Sun Capital’s affiliated portfolio companies would rank in the top 100 of Fortune Magazine’s listing of the 500 largest companies in the United States. Sun Capital has over $9.1 billion of capital under management.]]>