Borden Dairy to be sold to Capitol Peak Partners and KKR for $340m

Borden Dairy, a US dairy processor, has been approved to be sold to Capitol Peak Partners and KKR for about $340 million through a court-supervised sale process.

The Texas-based dairy company will come out of bankruptcy following its sale to the two firms. Capitol Peak will have majority ownership of the new dairy company, while KKR, which is an existing lender to Borden Dairy, will be a minority investor.

Following the transaction, the dairy processor will be suitably capitalized, and the business will stay intact, including all plants, branches, routes, and also the Borden brand.

The newly reorganized Borden Dairy will be able to continue employment for nearly 3,300 employees and also its service for customers.

Tony Sarsam – Borden Dairy CEO said: “Borden received strong investor interest and multiple bids throughout this sale process, which is a testament to the terrific work the people of Borden have done to build a valuable and enduring 163-year-old brand.

“Despite being in the midst of Chapter 11 and a global pandemic, our team managed to generate positive cash flow, grow our customer footprint and maintain an uninterrupted food supply to nourish American families. We are exiting Chapter 11 as a thriving company that is meeting and exceeding its performance forecasts, making our outlook very promising.”

Borden Dairy to be sold to Capitol Peak Partners and KKR for $340m. Photo courtesy of Carol M. Highsmith/Wikipedia.org.

Borden Dairy launched voluntary reorganization proceedings on 5 January 2020, to undertake a financial restructuring designed for bringing down its current debt, maximize value, and position itself for long-term success.

After closing of the deal, Borden Dairy’s former controlling and majority stakeholders – ACON Investments and Grupo Lala, respectively, will no longer have an ownership interest in the company.

Gregg Engles – Capitol Peak Founder and Managing Partner said: “Borden has a rich history of partnering with America’s dairy farmers and leading retailers to provide wholesome nutrition for American consumers and families.

“The Capitol Peak team is excited by this unique opportunity to work alongside KKR and build this iconic dairy company.”

The deal, which is subject to certain closing conditions such as the entry of a final order, is likely to be finalized in mid-July.