Executives on Sept. 6 decided not to sell the company. Dean Foods cited data from Information Resources, Inc., a Chicago-based market research firm, showing the U.S. fluid milk category has declined about 4% year over year through Sept. 29.
Its retail brands include Borden cheese and Keller’s creamery.
The company after the second quarter ended June 30 had total net debt of about $968 million.Dean Foods’ stock price closed at 80c per share on Nov. 11 on the New York Stock Exchange, which compared to a 52-week high of $6.27.In February 2019 the board of directors began a review of strategic alternatives, including a possible sale of the company.
in the third quarter. Challenges in the milk category on top of the unfunded pension liabilities were “too much to overcome,” he said.The Dallas-based company’s filing and debtor-in-possession financing reduces the recovery value for debt holders and “could drive prices lower,” Ngo wrote.Dean has been hemorrhaging executives as well as cash, with Chief Financial Officer Jody Macedonio and general counsel Russell Coleman stepping down in September. filing listed several headwinds facing the dairy industry.
DFA monitored Dean’s financial performance “closely since the business began showing signs of distress” and began “preparing for various scenarios, including a bankruptcy filing, in order to minimize the impact,” Massey said.According to Rabobank, Dairy Farmers of America is the sixth-biggest dairy company in the world by sales, and Dean Foods is No.
Other bidders may emerge during the bankruptcy process, Massey said, adding that DFA’s offer would be contingent upon various approvals, including a review of Dean Foods’ assets and clearance from U.S. antitrust regulators.Chief Executive Officer Eric Beringause, who joined the company about three months ago, said the current path, led by a new senior management team, would lead to a turnaround.Dean’s bankruptcy was the “clearest option” for addressing the pension and debt load, Wells Fargo equity analyst John Baumgartner said in a note. The project was designed to reduce costs and optimize the company’s manufacturing capacity.Dean Foods has received a commitment of about $850 million in debtor-in-possession financing from certain existing lenders, including Rabobank.
I am confident we have the right people in place to lead us through this process.”