MONTREAL — Saputo Inc. has reached an agreement to acquire Dairy Crest Group P.L.C. in a transaction valued at approximately £975 million ($1.27 billion).
Headquartered in the United Kingdom, Dairy Crest manufactures and markets cheese, butters, spreads and oils under British brands such as Cathedral City, Clover, Country Life and Frylight, as well as value-added dairy ingredients. Dairy Crest employs approximately 1,100 people in seven locations across the United Kingdom.
In the year ended March 31, 2018, Dairy Crest had revenues of approximately £456.8 million and profit after tax of approximately £149.5 million.
Saputo said the transaction will allow it to expand its international presence and enter the U.K. market by acquiring and investing in “a well-established and successful industry player with a solid asset base and an experienced management team.”
“Dairy Crest is an attractive platform for Saputo and fits well within our growth strategy,” said Lino A. Saputo Jr., chairman and chief executive officer of Saputo. “We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest’s employees and stakeholders. This recommended offer represents a compelling opportunity for Dairy Crest shareholders, providing immediate value certainty.”
Stephen Alexander, chairman of Dairy Crest, said the acquisition should enable Dairy Crest to benefit from Saputo’s global expertise and strong financial position to fulfill and accelerate its growth ambitions.
“The businesses have strong shared values and the board is confident that Saputo’s plans to invest in and grow the Dairy Crest business mean the proposed transaction is positive for all its stakeholders,” Mr. Alexander said. “The price premium Saputo is offering reflects Dairy Crest’s portfolio of market-leading brands, its manufacturing and innovation capabilities as well as its experienced management team, who will continue to run the business under Saputo’s ownership. It is for these reasons that the board is unanimously recommending this transaction to Dairy Crest shareholders.”
Saputo produces, markets and distributes a wide array of dairy products, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients. Saputo is the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, the top dairy processor in Australia and the second largest in Argentina. In the United States, Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products.