Dean Foods has announced a deal to acquire the Friendly’s Ice Cream manufacturing and retail ice cream business, in a deal worth $155m in cash.
The Northeast US-based Friendly’s generated $166m in sales in 2015, producing packaged ice cream and other frozen dessert products, including single-serve sundae cups, novelty items, cakes and rolls. Friendly’s distributes these products in over 8,000 retail outlets.
The deal includes the Friendly’s trademark as well as all intellectual property associated with the ice cream business. Friendly’s will continue to operate out of its facility in Wilbraham, Massachusetts, and its senior management team will continue to lead the business.
Dean said Friendly’s Ice Cream’s growth momentum, strong brand presence in the Northeast US, and attractive financial profile, make it “a compelling investment”. Gregg Tanner, CEO of Dean, added: “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.”
The deal is expected to immediately add to margins and earnings, and is expected to close late in the second quarter of 2016.
Friendly’s Restaurants, which has over 260 locations in the US, will continue to be owned and operated by an affiliate of Sun Capital Partners, and will license use of the Friendly’s trademark under a license agreement entered into as part of the transaction.