Texas-based food and beverage company Dean Foods has agreed to acquire the manufacturing and retail ice cream business of Friendly's Ice Cream for $155m in cash.
Friendly's Ice Cream produces packaged ice cream and other frozen dessert products, including single-serve sundae cups, novelty items, cakes and rolls. The company distributes these products in more than 8,000 retail outlets. Its net sales stood at $166m in 2015.
The products are claimed to be made from high quality ingredients with focus on distinctive flavours, formulations and packaging.
Dean Foods CEO Gregg Tanner said: "Coupled with the momentum of Dean Foods' current regional brands, the Friendly's brand will be a catalyst in our strategy to grow our existing ice cream business and branded portfolio.
"Friendly's is an ideal complement to our other heritage brands across the country and fills a manufacturing and retail ice cream void in our nationwide footprint.
"Friendly's ice cream strongly resonates with consumers throughout the Northeast. Very similar to the traditions shared by consumers who grew up enjoying our existing regional milk and ice cream brands, such as Mayfield or Dean's, we believe the Friendly's ice cream brand represents and promotes what Dean Foods has built itself around and is a great fit in our branded portfolio."
Dean Foods plans to fund the transaction with its cash reserves and existing revolving credit facilities.
Apart from the manufacturing and retail businesses, Dean Foods will also take ownership of Friendly's trademark and all intellectual property associated with the ice cream business.
The deal is expected to be completed in the second quarter of 2016 after gaining required regulatory approvals and reaching other customary closing conditions.
Following the completion of the transaction, Friendly's Ice Cream will continue to function from its headquarters in Wilbraham, Massachusetts, and its senior management team will continue to lead the business.
