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Saputo, Dean Complete Morningstar Foods Transaction
USAgNet - 01/07/2013

Saputo Inc. completed the transaction to acquire Morningstar Foods, LLC, a subsidiary of Dean Foods Company, on Jan. 3, one month to the day after the agreement was announced. The purchase price of $1.45 billion was financed through a combination of $250 million in available cash and a new bank loan of $1.2 billion.

Morningstar has about $1.6 billion in annual revenues, approximately 2,000 employees and operates 10 manufacturing facilities located in nine states. The combined business will have approximately 12,000 employees, 57 manufacturing facilities in five countries and combined annual revenues of approximately $8.6 billion. The acquisition of Morningstar complements the activities of the Saputo Dairy Products Division (USA).

Morningstar produces a variety of dairy and non-dairy extended shelf-life products, including creams and creamers, ice cream mixes, whipping cream, aerosol whipped toppings, iced coffee, half and half and value-added milks, as well as cultured products such as sour cream and cottage cheese. The products are manufactured under a wide array of private labels and owned brands, and are sold nationwide through an internal sales force and independent brokers. Morningstar serves the needs of retailers, national quick-serve restaurant chains, grocery stores, mass merchandisers and distributors across the United States.

As a result of this transaction, Dean expects to realize approximately $887 million in proceeds, net of taxes and expenses. The company plans to use all net proceeds toward fully retiring its remaining senior secured term debt, significantly lowering its leverage and increasing its financial flexibility.

Dean Foods also completed the previously announced transaction with The WhiteWave Foods Company, another of its controlled subsidiaries, whereby WhiteWave received $60 million net of taxes as consideration for the termination of an option to purchase plant capacity and property at a Morningstar facility and the sale to Morningstar of certain manufacturing equipment located at another Morningstar plant.

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