UK – Canadian dairy company, Saputo Inc. has said it will acquire leading British dairy products company, Dairy Crest in a cash consideration estimated at US$1.2 billion (£975 million).
The Montreal-based Saputo has agreed to buy the entire issued and to be issued ordinary share capital of Dairy Crest for £6.20 (US$8.09) per ordinary share.
The transaction, which is subject to approval by the shareholders of Dairy Crest, will be funded through funds drawn on a new bank term loan facility.
The deal is expected to close in the second quarter of 2019.
With Dairy Crest, which has a strong product portfolio including cheese, butters, spreads and oils, Saputo will be able to expand its international presence and enter the UK market.
“It is currently intended that the Transaction will be implemented by way of a Court-sanctioned scheme of arrangement under the UK Companies Act 2006.
The Transaction is subject to approval by the shareholders of Dairy Crest, the Court’s sanction of the scheme of arrangement as well as other conditions customary for this type of transaction,” said the company statement.
Dairy Crest has well known brands such as Cathedral City Cheddar cheese, Country Life butter, Utterly Butterly, Vitalite and Clover.
According to Saputo, the company is a well-established and successful industry player with a solid asset base and an experienced management team.
It added that Dairy Crest was an attractive platform which fits with Saputo’s growth strategy.
In the year ended March 31, 2018, Dairy Crest reported US$596.25 million in revenues and profit after tax for the period of approximately US$195.14 million.
The company sold its dairy unit comprising of ready-to-drink flavoured milk brand Frijj, cream, bulk butter and milk powders, to Müller in a deal approximated at US$104.42 million in 2015.
Last year, Dairy Crest invested US$97.89 million in expansion of its creamery in Davidstow, Cornwall in a bid to boost its Cathedral City and Davidstow cheese brands.
Saputo which is one of the world’s leading dairy processors, said it is building a new dairy processing facility worth US$240 million in Port-Coquitlam, Canada.
It acquired Australia’s struggling dairy business Murray Goulburn in 2017, and other businesses it has agreed to buy include Montchevre, Shepherd Gourmet Dairy, and F&A Dairy Products.