Dean Foods Company Announces Agreement to Acquire Friendly's Ice Cream Retail and Manufacturing Business

DALLAS, May 9, 2016 /PRNewswire/ -- Dean Foods Company ("Dean Foods") (NYSE: DF) announced today that it has agreed to acquire the manufacturing and retail ice cream business ("Friendly's Ice Cream") from an affiliate of Friendly's Ice Cream, LLC ("Friendly's Restaurants"), a leading ice cream and dining brand in the Northeast U.S., for $155 million in cash.

Friendly's Ice Cream, with $166 million in net sales in 2015, is an iconic brand that produces popular packaged ice cream and other frozen dessert products, including single-serve sundae cups, novelty items, cakes and rolls. Friendly's distributes these products in over 8,000 retail outlets. Products are made from high quality ingredients with an emphasis on innovative flavors and unique formulations and packaging. Founded in 1935, the brand has a rich heritage and a long history of delighting consumers.

"We are thrilled at the prospects the Friendly's Ice Cream acquisition brings to Dean Foods," said Gregg Tanner, CEO. "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."

Tanner continued, "We think the Friendly's culture will be an excellent fit for Dean Foods, and we are delighted to welcome the Friendly's employees into our company. Working together with the senior leadership team of Friendly's Ice Cream, we look forward to continuing to grow the manufacturing and retail ice cream business."

Friendly's Ice Cream's growth momentum, strong brand presence in the Northeast U.S., and attractive financial profile, make it a compelling investment. The acquisition of Friendly's Ice Cream is expected to be immediately accretive to margins and earnings, and Dean Foods expects that the acquisition will add approximately $0.06 earnings per share accretion in 2016. At closing, Dean Foods intends to fund the transaction with cash on hand and our existing revolving facilities.

Tanner concluded, "Friendly's ice cream strongly resonates with consumers throughout the Northeast. Very similar to the traditions shared by consumers who grew up enjoying our existing regional milk and ice cream brands, such as Mayfield or Dean's, we believe the Friendly's ice cream brand represents and promotes what Dean Foods has built itself around and is a great fit in our branded portfolio. 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 leading family-dining restaurant chain with over 260 locations in the U.S., will continue to be owned and operated by an affiliate of Sun Capital Partners, Inc. and will license use of the Friendly's trademark under a license 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 customary closing conditions. Following the close of the transaction, Friendly's Ice Cream will continue to operate out of its facility in Wilbraham, Massachusetts, and the senior management team of Friendly's Ice Cream will continue to lead the business.

Rothschild Inc. acted as financial advisor to Dean Foods on the transaction, and Gibson Dunn provided legal support. Lazard Middle Market served as financial advisor to Friendly's Ice Cream on the transaction, and Morgan, Lewis & Bockius was the company's legal advisor.

About Dean Foods

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. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, the country's first and largest fresh, white milk national brand, and TruMoo®, the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena®, Berkeley Farms®, Country Fresh®, Dean's®, Garelick Farms®, LAND O LAKES®* milk and cultured products*, Lehigh Valley Dairy Farms®, Mayfield®, McArthur®, Meadow Gold®, Oak Farms®, PET®**, T.G. Lee®, Tuscan® and more. In all, Dean Foods has more than 50 national, regional and local dairy brands as well as private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Almost 17,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.

*The LAND O LAKES brand is owned by Land O'Lakes, Inc. and is used by license.

**PET is a trademark of The J.M. Smucker Company and is used by license.
Some of the statements made in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the expected completion date for the acquisition of the Friendly's Ice Cream business, and other statements that begin with words such as "expect," "believe," "should" or "anticipate."

The statements above involve risks and uncertainties that may cause results to differ materially from those set forth in this press release. The Friendly's Ice Cream business may not achieve the level of sales or profitability that justifies our investment, or may have unidentified liabilities for which it may remain responsible following the acquisition by Dean Foods. The success of the Friendly's acquisition may depend on our ability to effectively integrate its products into our existing operations, achieve anticipated cost savings, or retain key customers, suppliers, and employees of Friendly's Ice Cream business. Financial projections are based on a number of assumptions, and actual results could be materially different than projected if those assumptions are incorrect. Dean Foods' ability to meet targeted financial and operating results depends on a variety of economic, competitive, and governmental factors, including raw material availability and costs, the demand for Dean Foods products, and Dean Food's ability to access capital under its credit facilities or otherwise, many of which are beyond Dean Food's control and which are described in Dean Food's 2015 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 30, 2016. 

All forward-looking statements in this press release speak only as of the date of this press release. Dean Foods expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based except as required by law.

CONTACT: Corporate Communications, Jamaison Schuler, +1-214-721-7766; or Investor Relations, Sherri Baker, +1-214-303-3438

SOURCE Dean Foods Company

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