Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Agropur to double U.S. dairy processing with deal for Davisco Foods assets

MONTREAL - Agropur, Canada's largest dairy co-operative, will double its U.S. processing operations with a deal to buy the dairy processing assets of Davisco Foods International, its third acquisition this month.

"With over US$1 billion in annual sales, this acquisition is by far the largest transaction in Agropur's 76-year history," president Serge Riendeau said Tuesday after the purchase was announced.

It follows several recent transactions which together will increase Agropur's annual sales to more than $5.8 billion from $3.8 billion and increase milk processing to 5.3 billion litres at 41 plants across North America.

Agropur will finance the purchase that's set to close Aug. 1 with cash and new credit facilities underwritten by Desjardins Capital Markets, BMO Capital Markets and Rabobank.

The Quebec-based co-operative said it will become the fifth-largest cheese and ingredients processor in the United States.

In the past two weeks, Agropur has also announced the acquisition of the dairy and food distribution assets of New Brunswick's Northumberland Dairy Co-operative and the $356-million purchase of Sobeys milk, yogurt and ice cream manufacturing operations in Western Canada.

Chief executive Robert Coallier said recent acquisitions will help "solidify the development and sustainability" of the co-operative by diversifying its geographic markets and portfolio of products.

"The world dairy industry is consolidating at an accelerated pace and our acquisition of Davisco supports our objective of increasing our global presence."

The U.S. currently accounts for 40 per cent of its revenues.

"This allows us to have a greater critical mass, and at the same time, to become a more significant player in this market," he added in an interview.

Coallier said the acquisition puts Agropur in a stronger position because Davisco already exports its products.

"(The transaction) will provide us with a larger platform to improve our performance in this area," he said.

Jon Davis, CEO of the Minnesota-based family run company which also operate Davis Family Dairies, said Davisco and Agropur have each been built over decades with very similar cultures.

The transaction announced Tuesday will add cheese processing operations in Minnesota, Idaho and South Dakota, an ingredients plant and a retail store, plus sales and distribution offices in the U.S., China, Singapore, Geneva and the Netherlands.

Privately owned Davisco employs 900 workers and annually processes 1.7 billion litres of milk, making more than 170 million kilograms of cheese and 80 million kilograms of whey ingredients.

Founded in 1938, Agropur processes more than 3.4 billion litres of milk a year in its 32 plants across Canada and the United States. It includes 3,554 dairy producer owners and 6,500 employees.

Its brands include Natrel, Quebon, OKA, Farmers, Central Dairies, Sealtest, Island Farms, Olympic and iogo.

— With files from Julien Arsenault

Follow @RossMarowits on Twitter

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
The First World War at 100

Social Media

Canadian Mortgage Rates