Canada's Saputo Buys Two U.S. Cheese Processing Plants for $85 Million

Canadian dairy company Saputo Inc. is purchasing two cheese processing plants in New Mexico and Wisconsin, helping expand the dairy processors footprint in the U.S.

Saputo made the announcement on Oct. 26 that the processor was buying F&A Dairy Products, Inc. Included in the purchase are two manufacturing facilities located in Las Cruces, New Mexico and Dresser, Wisconsin. F&A Dairy Products employs 170 people.

The purchase amount is US$85 million (approximately CDN$111 million) and will be paid in cash from cash on hand and available credit facilities.

A variety of natural cheeses, including mozzarella and provolone, are produced by F&A Dairy Products. The company ships products to Mexico and throughout the U.S. During a 12 month period ending on Aug. 31, 2018, F&A Dairy Products created approximately US$163 million (CDN$212 million) in revenue.

The transaction is pending some customary conditions which includes regulatory approval. The sale is expected to be closed by the end of 2018.

The purchase of F&A Dairy Products is the latest by Saputo in a number of moves made to expand in the U.S. Last year, Saputo bought an extended shelf-life dairy plant from Southeast Milk in Florida. In 2013, Morningstar Foods formerly owned by Dean Foods Company was purchased, giving Saputo an offering dairy and non-dairy extended shelf-life in the U.S. Other U.S. processing plants have been purchased in the past decade such as two California cheese plants and a Wisconsin cheese plant.

Saputo operates a U.S. division that includes the Dairystar and Friendship Dairies brands and markets a number of products under the label, including: milk, cottage cheese, ice cream, creamers and whipped cream.

According to RaboBank, Saputo is the 8th largest dairy processor in the world after switching spots with China’s Yilli Group. Prior to buying Australia’s Murray Goulburn Co-Operative Co. this year, Saputo had 50 manufacturing facilities in Canada, the U.S., Australia and Argentina, employing approximately 12,800 people.