DALLAS, Nov. 12, 2019 /PRNewswire/ -- Dean Foods Company
(NYSE: DF) ("Dean Foods" or the "Company") today
announced that it and substantially all of its subsidiaries
have initiated voluntary Chapter 11 reorganization proceedings in
the Southern District of Texas.
The Company intends to use this process to protect and support its
ongoing business operations and address debt and unfunded pension
obligations while it works toward an orderly and efficient sale of
the Company.
Dean Foods also announced that it is engaged in advanced
discussions with Dairy Farmers of America, Inc. ("DFA") regarding a
potential sale of substantially all assets of the Company. If the
parties ultimately reach agreement on the terms of a sale, such
transaction would be subject to regulatory approval and would be
subject to higher or otherwise better offers in the bankruptcy.
Dean Foods is operating in the ordinary course of business and
remains focused on providing its customers with wholesome,
great-tasting dairy products and the highest levels of quality,
service and value. The Company has received a commitment of
approximately $850 million in
debtor-in-possession ("DIP") financing from certain of its existing
lenders, led by Rabobank. Following court approval, the Company
expects to use the DIP financing, together with cash on hand and
operating cash flows, to support its continued operation throughout
this process, including payment of employee wages and benefits
without interruption and payment to suppliers and vendors in full
under normal terms for goods and services provided on or after the
filing date.
"The actions we are announcing today are designed to enable us
to continue serving our customers and operating as normal as we
work toward the sale of our business," said Eric Beringause, who recently joined Dean Foods
as President and Chief Executive Officer. "We have a strong
operational footprint and distribution network, a robust portfolio
of leading national brands and extensive private label
capabilities, all supported by approximately 15,000 dedicated
employees around the country. Despite our best efforts to make our
business more agile and cost-efficient, we continue to be impacted
by a challenging operating environment marked by continuing
declines in consumer milk consumption. Importantly, we are
continuing to provide customers with an uninterrupted supply of
high-quality dairy products, as well as supporting our dairy
suppliers and other partners."
Mr. Beringause continued, "Since joining the company just over
three months ago, I've taken a hard look at our challenges, as well
as our opportunities, and truly believe we are taking the best path
forward. In recent months, we have put in place a new senior
management team that not only has considerable experience in the
dairy and consumer product industries, but also in executing major
turnarounds. I am confident we have the right people in place to
lead us through this process. I want to thank all Dean Foods
employees for their continued commitment to our customers, our
partners and our company. I also want to thank our suppliers and
other business partners for their cooperation and our customers for
their continued support."
In conjunction with the court-supervised process, Dean Foods has
filed a number of customary motions seeking court authorization to
continue to support its business operations. The Company expects to
receive court approval for all of these requests. The Company also
intends to file bidding procedures with the court to conduct a sale
in accordance with Section 363 of the U.S. Bankruptcy Code and work
with its creditors to explore a potential stand-alone plan of
reorganization.
Additional information is available on the restructuring page of
the Company's website, www.DeanFoodsRestructuring.com. In addition,
court filings and other information related to the proceedings are
available on a separate website administered by the Company's
claims agent, Epiq Corporate Restructuring, LLC, at
https://dm.epiq11.com/SouthernFoods, or by calling Epiq
representatives toll-free at 1-833-935‐1362 or 1-503-597-7660 for
calls originating outside of the U.S.
Davis Polk & Wardwell LLP and
Norton Rose Fulbright are serving as
legal advisors to the Company, Evercore is serving as its
investment banker and Alvarez & Marsal is serving as its
financial advisor.
In light of the bankruptcy filing, the Company has cancelled its
quarterly earnings call, which was scheduled to take place today at
9:00 a.m. Eastern time.
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, national white milk 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®, Friendly'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. Dean Foods also has a joint venture with Organic Valley®,
distributing fresh organic products to local retailers. 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. Approximately 15,000 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.
Forward-Looking Statements
This press release
includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, included in this release
that address activities, events or developments that the Company
expects, believes, targets or anticipates will or may occur in the
future are forward-looking statements. The Company's actual results
may differ materially from those anticipated in these
forward-looking statements as a result of certain risks and other
factors, which could include the following: risks and uncertainties
relating to the Company's Chapter 11 cases (the "Chapter 11 Case"),
including but not limited to, the Company's ability to obtain
bankruptcy court approval with respect to motions in the Chapter 11
Case, the Company's ability to consummate the planned sale of the
business pursuant to the Chapter 11 Case and, if consummated, to
obtain an adequate price, the effects of the Chapter 11 Case on the
Company and on the interests of various constituents, bankruptcy
court rulings in the Chapter 11 Case and the outcome of the Chapter
11 Case in general, the length of time the Company will operate
under the Chapter 11 Case, risks associated with third-party
motions in the Chapter 11 Case, the potential adverse effects of
the Chapter 11 Case on the Company's liquidity or results of
operations and increased legal and other professional costs
necessary to execute the Company's reorganization; the conditions
to which the Company's debtor-in-possession financing is subject
and the risk that these conditions may not be satisfied for various
reasons, including for reasons outside of the Company's control;
the consequences of the acceleration of our debt obligations; as
well as other risk factors set forth in the Company's Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q filed with the
Securities and Exchange Commission. Additionally, there can be no
assurances that Dean and DFA will ultimately reach agreement, that
the sale will receive regulatory approval, or that the sale will be
successfully consummated. The Company therefore cautions readers
against relying on these forward-looking statements. All
forward-looking statements attributable to the Company or persons
acting on the Company's behalf are expressly qualified in their
entirety by the foregoing cautionary statements. The Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect
any change in its 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.
Contacts
Investor Relations
+1 214-303-3438
Media
+1 214-721-7766
media@deanfoods.com
Michael Freitag / Aura Reinhard / Viveca
Tress
Joele Frank, Wilkinson Brimmer
Katcher
+1 212-355-4449
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SOURCE Dean Foods Company