APPLETON, WI, July 22, 2014 /PRNewswire/ – Agropur, Canada’s largest
dairy cooperative, and Davisco Foods International, a US-based cheese
and dairy ingredients company, today announced they have entered into
an agreement for Agropur to acquire the dairy processing assets of
Davisco.

The acquisition is targeted to close August 1, 2014, subject to
satisfaction of customary closing conditions. This transaction will
double Agropur’s US processing operations and will increase its global
milk intake by 50%. It will also strengthen its position in the North
American and international dairy industries.

“With over US$1 billion in annual sales, this acquisition is by far the
largest transaction in Agropur 76 year history,” said Serge Riendeau,
president of Agropur. “This transaction, combined with the most recent
ones in Canada, will increase our sales to over US$5.4 billion on an
annualized 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.”

“The world dairy industry is consolidating at an accelerated pace and
our acquisition of Davisco supports our objective of increasing our
global presence,” said Robert Coallier, CEO, Agropur. “One of our key
business objectives is to pursue strategic acquisitions to diversify
our geographic markets and product portfolios. 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,” Coallier added.

“I am excited about this opportunity and what it affords our suppliers,
customers and most importantly, our employees,” said Jon Davis, Davisco
CEO. “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 added.

“This acquisition increases in an important way our capacity to meet our
clients’ needs for cheese and dairy ingredients in the US,” concluded
Agropur’s USA Cheese and ingredients Division, Doug Simon.

Headquartered in Le Sueur, Minnesota, Davisco processes 3.8 billion
pounds (1.7 billion liters) of milk annually and has 900 employees.

The acquisition includes three Davisco cheese processing factories in Le
Sueur (Minnesota), Jerome (Idaho) and Lake Norden (South Dakota). It
also includes an ingredients plant in Nicollet (Minnesota), a Friendly Confines Cheese Shoppe in Le Sueur (Minnesota), 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.

Davisco produces over 170 million Kg (375 million pounds) of cheese and
80 million Kg (180 million pounds) of whey ingredients annually.

Agropur will finance the total consideration from existing cash
resources and new credit facilities fully-underwritten by the Co-Lead
Arrangers and Joint Bookrunners Desjardins Capital Markets, BMO Capital
Markets and Rabobank. Desjardins Capital Markets acted as financial
advisor to Agropur.

About Agropur
Founded in 1938, Agropur is an important player in the North American
dairy industry. With sales of $3.8 billion, the Cooperative is a source
of pride for its 3,554 dairy producer-owners and 6,500 employees.
Agropur processes more than 3.4 billion litres of milk per year in its
32 plants across the United States and Canada, and boasts an impressive
line of products that includes such prestigious brands as Natrel,
Qu bon, OKA, Farmers, Central Dairies, Sealtest, Island Farms, Agropur
Grand Cheddar and finally Olympic and iögo, from Ultima Food, a Agropur
Cooperative joint venture. Visit www.agropur.com

About Davisco Foods International
Davisco Foods International (www.daviscofoods.com) is a privately held, family-owned dairy business headquartered in Le
Sueur, Minnesota. Davisco is an important producer of cheese, whey and
other dairy-based food ingredients in South Dakota, Minnesota, and
Idaho.

SOURCE Agropur