Dean Foods Completes Acquisition of Friendly's Ice Cream Retail and Manufacturing Business

23 Jun 2016 --- Dean Foods Company have announced that it has completed the previously disclosed acquisition of the manufacturing and retail ice cream business, Friendly's Ice Cream, from affiliate, 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, unique formulations and packaging. Founded in 1935, the brand has a rich heritage and a long history of delighting consumers.

Dean Foods' acquisition of Friendly's Ice Cream reinforces the company as a clear U.S. leader in ice cream, with recognizable brands such as Mayfield and Dean's Country Fresh®. The company's 2015 ice cream net sales totaled nearly $1 billion.

"The addition of Friendly's to the Dean Foods family boosts our already-strong position in the ice cream category," said Gregg Tanner, CEO. "Dean Foods is the United States' third largest branded ice cream company. 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."

The acquisition of the Friendly's Ice Cream manufacturing and retail business 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. Dean Foods is funding the transaction with cash on hand and our existing revolving facilities.

In addition to acquiring Friendly's manufacturing and retail ice cream business, Dean Foods is acquiring 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 license and supply agreements entered into as part of the transaction.

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.