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DFA ‘successful’ bidder on more than 40 Dean properties

Progressive Dairy Editor Dave Natzke Published on 31 March 2020

Editor's note: This article has been updated to include comments from Dairy Farmers of America and Dean Foods.

Court documents filed by attorneys representing Dean Foods have identified Dairy Farmers of America (DFA) as the “successful” bidder for more than 40 Dean facilities as part of ongoing bankruptcy proceedings.

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The documents were filed early on March 31, shortly after the bid submission deadline of March 30, in the U.S. Bankruptcy Court for the Southern District of Texas. Identified by Dean attorneys, the list of “successful” bidders was posted in a docket (#1270) on the hearing website. A separate docket (#1271) lists all entities submitting bids for Dean assets and properties, and more than 20 separate dockets list alternative bids for individual Dean properties.

The bankruptcy court must review bids before ruling on bid approvals. Based on the timeline laid out in the court order, any bid objections must be filed by April 1. A hearing on sale transaction will then be held April 3. Subject to court approval, the transactions are expected to close at the end of April 2020.

DFA’s bid is contingent upon approval by the Bankruptcy Court and U.S. Department of Justice, as well as finalization of collective bargaining agreements with multiple unions, according to Monica Massey, DFA’s executive vice president and chief of staff.

DFA’s bid includes all assets and properties listed in an asset purchase agreement (APA) originally submitted to the bankruptcy court as part of a motion to declare DFA the “stalking horse” bidder. Read: DFA, Dean Foods reach initial $425 million ‘stalking horse’ agreement.

The stalking horse motion, submitted in February 2020, was later withdrawn, and procedures regarding bidding procedures and the sale of Dean properties were approved by Judge David Jones on March 19. Read: Proposed order withdraws DFA as Dean ’stalking horse’ bidder.

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“After many months of uncertainty regarding the future of Dean Foods, we are pleased to have been named the accepted bidder for a large portion of Dean’s assets,” Massey said. “The more than 13,500 dairy farmers who own our cooperative, and dairy farmers across the country, will now benefit from these milk markets remaining open. Throughout this process, our main focus has always been, and continues to be, on maintaining milk markets and limiting disruption to the industry.”

Properties listed

DFA’s bids on 44 Dean facilities totaled $433 million. According to the court docket, the list of successful DFA bids covered the assets, rights, interests and properties relating to Dean facilities in:

  • Athens, Tennessee
  • Albuquerque, New Mexico
  • Belvidere, Illinois
  • Billings, Montana
  • Birmingham, Alabama
  • Boise, Idaho
  • Burlington, New Jersey
  • City of Industry (North), California
  • City of Industry (South), California
  • Dallas, Texas
  • Decatur, Indiana
  • De Pere, Wisconsin
  • El Paso, Texas
  • Englewood, Colorado
  • Franklin, Massachusetts
  • Grand Rapids, Michigan
  • Great Falls, Montana
  • Greely, Colorado
  • Harvard, Illinois
  • High Point, North Carolina
  • Houston, Texas
  • Huntington, Indiana
  • Lansdale, Pennsylvania
  • Las Vegas, Nevada
  • Lebanon, Pennsylvania
  • Le Mars, Iowa
  • Lubbock, Texas
  • Marquette, Michigan
  • Nashville, Tennessee (two plants)
  • Orlando and Orange City, Florida
  • Rensselaer, New York
  • Rockford, Illinois
  • Salt Lake City, Utah
  • San Antonio, Texas
  • Schuykill, Pennsylvania
  • Sharpsville, Pennsylvania
  • St. George, Utah
  • Spartanburg, South Carolina
  • Springfield, Ohio
  • Toledo, Ohio
  • Wilbraham, Massachusetts
  • Winston-Salem, North Carolina

Alternative bidders

DFA faced alternate bidders on about 15 Dean properties:

  • Country Delight bid on properties in Harvard and Rockford, Illinois, and De Pere, Wisconsin
  • Darigold submitted bids on properties at Salt Lake City, Utah; Boise, Idaho; and Billings, Montana.
  • Golden West Dairy LLC, submitted bids on properties at Albuquerque, New Mexico, and Lubbock and El Paso, Texas
  • Hollandia Dairy Inc. bid on the property at the City of Industry (South), California
  • Maryland and Virginia Milk Producers Cooperative Association Inc. bid on the property at High Point, North Carolina
  • OP Church Street Property LLC bid on the Country Delite property at Nashville, Tennessee
  • Producers Dairy Foods bid on the property at Las Vegas, Nevada.
  • Upstate Niagara Cooperative Inc. bid on properties at Rensselaer, New York, and Sharpsville, Pennsylvania.

Prairie Farms Dairy to acquire 10 properties

Another large dairy cooperative, Prairie Farms Dairy Inc., headquartered in Carlinville, Illinois, was identified as the successful bidder on 10 Dean properties (listed below), as well as a customer list related to the facility located at Louisville, Kentucky. The bid of $75 million covered the following locations:

  • Birmingham, Alabama (milk)
  • Tulsa, Oklahoma
  • Sioux Falls, South Dakota
  • Bismarck, North Dakota
  • Woodbury, Minnesota
  • Marietta, Ohio
  • O’Fallon, Illinois
  • Hammond, Louisiana
  • Akron, Ohio
  • Livonia, Michigan

“We ran a competitive auction process and are pleased to have reached these agreements, which we believe represent the best path forward for our stakeholders,” said Eric Beringause, president and CEO of Dean Foods. “Dean Foods has strong and long-standing relationships with DFA and Prairie Farms Dairy. We are pleased that through these transactions, substantially all of our processing assets will continue to operate as dairies and will be owned by our dairy farmer partners with the resources, experience and industry expertise to continue to succeed in the current market environment. We are committed to completing these transactions as quickly as possible and to ensuring a smooth transition for our customers.”  end mark

Dave Natzke
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