Food and beverage producer Dean Foods Co. (NYSE: DF) said today that its has “decided to explore a transaction that may result in the sale of the Morningstar business.” The announcement also noted:
The company has not yet identified a buyer for Morningstar, but believes the business possesses an attractive portfolio in a growing marketplace and a top-notch management team. The company only intends to sell the Morningstar business if it can do so in a transaction that maximizes shareholder value and helps ensure the future success of the business.
Morningstar is the company’s wholesale delivery dairy business and is the smallest of its three segments. Net sales for the second quarter totaled $345 million and operating income totaled $32 million. That’s about 11% of sales and nearly 15% of operating income.
Dean wrote down $1.9 billion in goodwill against its dairy business last year.
Dean has also filed for an IPO of its White Wave-Alpro segment (the company’s largest) that would offer up to 20% of the segment to the public. Dean says it would use proceeds from the IPO to reduce outstanding debt.
A report at Reuters notes that interest in the Morningstar business has come primarily from private equity firms.
Shares of Dean Foods are up 6.4% at $ 16.37 in a 52-week range of $8.04 to $17.50.