Dairy Farmers of America’s Acquisition of Dean Foods Business Operations

Davis Polk & Wardwell LLP and Norton Rose Fulbright are serving as legal advisors to Dean Food Company.

Dairy Farmers of America executed the acquisition of a substantial portion of Dean Foods’s business operations. Pursuant to the agreement, DFA would acquire 44 of the Dean Foods’s fluid and frozen facilities and the real estate, inventory, equipment and all other assets necessary to operate such facilities.

The proposed agreement is subject to the approval of the bankruptcy court with jurisdiction over Dean Foods’ pending Chapter 11 cases and certain other closing conditions, including antitrust approval.

DFA will serve as the “stalking horse” bidder with respect to the acquired assets at an auction to be conducted under Section 363 of the Bankruptcy Code in the coming months and the proposed sale of the assets to DFA is therefore subject to higher or otherwise better offers. Dean Foods intends to work with its bondholders and other potentially interested parties in connection with their bids.

In addition, pursuant to asset purchase agreements between Dean Foods and acquirers Prairie Farms Dairy, MGD Acquisitions, Producers Dairy, Mana Saves McArthur and Harmoni, Inc., respectively, Dean Foods consummated sale transactions whereby such parties acquired a total of 11 of Dean Foods’s fluid and frozen facilities and associated assets not acquired by DFA and Dean Foods’s Uncle Matt’s organic juices business. Each sale transaction closed between April 30, 2020 and May 5, 2020.

Headquartered in Dallas, Texas, Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States.

Dairy Farmers of America, the largest U.S. dairy-farming cooperative by membership, markets nearly one-third of milk in the U.S. and operates its own milk-processing plants and dairy facilities.

Evercore served as investment banker and Alvarez & Marsal  served as financial advisor to Dean Food Company.

The Davis Polk restructuring and corporate team included partners Brian M. Resnick (Picture), Louis L. Goldberg and Harold Birnbaum, counsel Steven Z. Szanzer and associates Thomas D. Malinowsky, Cameron Adamson and Nate Sokol. Partner Arthur J. Burke and associate Benjamin M. Miller are providing antitrust and competition advice. Partner Hilary Dengel is providing finance advice. The executive compensation team included partner Jeffrey P. Crandall. Litigation partner Elliot Moskowitz provided advice with respect to labor and other litigation matters.

Involved fees earner: Cameron Adamson – Davis Polk & Wardwell; Harold Birnbaum – Davis Polk & Wardwell; Arthur Burke – Davis Polk & Wardwell; Jeffrey Crandall – Davis Polk & Wardwell; Hilary Dengel – Davis Polk & Wardwell; Louis Goldberg – Davis Polk & Wardwell; Thomas Malinowsky – Davis Polk & Wardwell; Benjamin Miller – Davis Polk & Wardwell; Elliot Moskowitz – Davis Polk & Wardwell; Brian Resnick – Davis Polk & Wardwell; Nathaniel Sokol – Davis Polk & Wardwell; Steven Szanzer – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Dean Foods Company;

Author: Ambrogio Visconti