Canada’s largest dairy co-operative, Agropur, has doubled its US processing operations with the acquisition of the dairy processing assets of Davisco. According to Serge Riendeau, president of Agropur, the acquisition is the largest transaction in Agropur’s 76-year history.
Davisco, a Minnesota-based cheese and dairy ingredients company produces over 170 million Kg (375 million pounds) of cheese and 80 million Kg (180 million pounds) of whey ingredients annually.
Said Mr Riendeau: “This transaction, combined with the most recent ones in Canada, will increase our sales to over US$5.4 billion on an annualised basis, and we should reach 12.1 billion pounds of milk processed each year in 41 plants across North America. As a result of this acquisition, the US operations of Agropur should reach the top five cheese and ingredients processors in the United States to even better serve its clients.”
With this acquisition, Agropur aims to increase its global presence. The co-operatives owned by 3,554 dairy producers reported sales of $3.8 billion last year.Chief executive Robert Coallier says one of the co-operative’s key business objectives is to diversify its geographic markets and product portfolios.
Agropur acquired three Davisco cheese processing factories, an ingredients plant, a Friendly Confines Cheese Shoppe, as well as sales offices located in Eden Prairie, Minnesota (North America Sales office), Shanghai (China Sales Office), Singapore (Southeast Asia Sales Office) and Geneva, Switzerland (Europe Sales Office), and distribution centres located in Rotterdam, the Netherlands, and Tianjin, China.
“This acquisition, like our other recent ones, will help solidify the development and sustainability of our cooperative by securing a favorable strategic positioning at all national, North American and global levels. To remain a leader in our field, we must pursue and continue development efforts that aim directly at profitable growth,” said Mr Coallier.
Doug Simon from Agropur’s USA Cheese and Ingredients Division thinks the acquisition increases the co-operative’s capacity to meet its clients’ needs for cheese and diary ingredients in the USA.
Chief executive of Davisco, John Davis, said the transaction would also be beneficial for his company, their suppliers, customers and employees.
“Davisco and Agropur have built, over 70 years, very similar cultures. Along with all of Davisco’s management team, I look forward to becoming part of the Agropur family and I am very excited about what the future holds. These are exciting times, and it will be a tremendous pleasure and an honor to be part of Agropur going forward,” he said.
To finance the transaction the co-operative has used existing cash resources as well as new credits obtained from Desjardins Group, BMO Capital Markets and Rabobank.