Dean Foods scoops up Friendly's ice cream retail and manufacturing business
The deal for the ice cream business, according to Dean Foods, cost $155m in cash, but does not include the Friendly’s restaurant chain.
Dean Foods will continue to produce Friendly's ice cream out of the facility in Wilbraham, Massachusetts, which produces Friendly's packaged ice cream and frozen dessert products, including single-serve sundae cups, cakes and rolls, along with ice cream for Friendly's restaurants.
Friendly’s ‘fills a void’ for Dean Foods
Friendly's Ice Cream distributes products in over 8,000 retail locations across the US, and has seen 105% growth in the retail business over the past five years.
Gregg Tanner, CEO of Dean Foods, said, "Coupled with the momentum of Dean Foods' current regional brands, the Friendly's brand will be a catalyst in our strategy to grow our existing ice cream business and branded portfolio. Friendly's is an ideal complement to our other heritage brands across the country and fills a manufacturing and retail ice cream void in our nationwide footprint."
Dean Foods said the acquisition is expected to be immediately accretive to margins and earnings, and it expects that the takeover will add approximately $0.06 earnings per share accretion in 2016.
Tanner said Friendly's ice cream resonates with consumers throughout the Northeast, adding, “Dean Foods is rooted in the traditional goodness of dairy, making Friendly's more than just a good business and financial opportunity."
In addition to acquiring Friendly's manufacturing and retail ice cream business, Dean Foods will acquire the Friendly's trademark as well as all intellectual property associated with the ice cream business.
Friendly's Restaurants, a family-dining restaurant chain with over 260 locations in the US, will continue to be owned and operated by an affiliate of Sun Capital Partners and will license use of the Friendly's trademark under an agreement entered into as part of the transaction.
The transaction is expected to close late in the second quarter of 2016, subject to regulatory approvals and other closing conditions.