Dairy foods producer Dean Foods is to buy the remaining 87 per cent share in organic milk leader Horizon Organic for around $216 million in cash, it announced today.
"Offering customers both the Horizon Organic and Silk brands within our organic product portfolio makes us the clear leader in the organic category," said Dean Foods CEO Greg Engles. "Horizon Organic has experienced tremendous growth, and its organic leadership position in both the United States and the UK represents a very compelling strategic fit for us."
Horizon Organic, which markets the leading organic milk brand in the United Kingdom (Rachel's Organic), recently launched the US' first organic infant formula. The Colorado-based firm reported revenues of approximately $187 million, and in April 2003, reached a milestone of $200 million in annual sales.
Engles said the acquisition showed the firm's commitment to the growth of "healthy, better-for-you products". Last year the firm bought soyfoods maker White Wave, revealing its desire to move into added-value 'healthy' products.
For Horizon Organic, the deal will boost its processing, distribution and marketing capacity, offering further growth potential for its brands. Chuck Marcy, president and CEO of Horizon Organic, said: "We are especially excited to leverage Dean Foods' unique national refrigerated distribution system, to expand the distribution of Horizon Organic branded milk, dairy and juice products. This will allow us to further support and encourage greater organic milk and organic crop production."
Dean Foods, which already owned the rest of Horizon Organic, will assume approximately $40 million in debt in the deal, expected to close during the fourth quarter of 2003 and still subject to approval by Horizon Organic's shareholders. The transaction is expected to be neutral to slightly accretive to earnings in the first full year after closing.