That contract has boosted the company during this difficult time. A team led by the former head of Dean Foods won the bankruptcy auction for Dallas-based Borden Dairy Co., according to reports from Bloomberg and Wall Street Journal.. We combine Bloomberg’s global leadership in business and financial news and data, with Quintillion Media’s deep expertise in the Indian market and digital news delivery, to provide high quality business news, insights and trends for India’s sophisticated audiences. We’ve read other publications, such as Bloomberg, all of which have not quite cottoned on that KKR’s involvement is through these BDCs which KKR & Co only co-manages and cannot even be called – as one journalist did – “KKR’s credit arm”. Anyway, as far as we can tell, the two FS-KKR lenders are teaming up with Capitol Peak and will – in all likelihood – undertake some sort of “debt for equity” swap. The free newsletter covering the top industry headlines, Press Release from Oregon Fruit Products. An investment firm won a bankruptcy auction for Borden Dairy Co., the company with a Lafayette plant that filed for Chapter 11 bankruptcy earlier this year. Former CEO of … During Engles' tenure at Dean Foods, his reputation went from being "milkman to the nation" to taking money for himself while his company was struggling. (Bloomberg) -- KKR & Co. teamed up with a firm led by the former head of Dean Foods Co. to win an auction for bankrupt Borden Dairy Co., putting KKR back in the milk business it gave up years ago. The private equity firm used what it was owed on the loan toward the Borden bid, according to The Wall Street Journal. Join our. Size: Each: 12.5 x 16 When Borden filed for bankruptcy, it reportedly had roughly $250 million in secured debt, with a $175 million loan held by firms including KKR. So we expect a lot of debt turning into equity; more capital advanced in debt or equity and bold attempts to turn around businesses that have fallen on hard times. Of course there have been debt for equity swaps in other industries as well and we expect the strategy to be the most popular one across the bankruptcy spectrum in 2020. After much back and forth and a hard fought auction, bankrupt Borden Dairy was purchased by a joint venture consisting of Capitol Peak and “KKR & Co” according to the Wall Street Journal. . When Borden filed for bankruptcy, CEO Tony Sarsam, who took the helm at the company in March 2018, said the milk supplier would use the bankruptcy process to reduce its debt load and continue normal business operations as it reorganized. In 1995, KKR purchased Borden for $2 billion and took it private after about 68 years as a public company. The future of meat manufacturing could include 3D scanners and automated cutting. Discover announcements from companies in your industry. Whether that will prove a successful approach overall remains to be seen, but the BDC Credit Reporter will keep score best we can. Bondholders from Borden proposed merging the two dairy giants if the DFA sale was rejected. The better-for-you trend has made its way into nearly ever facet of the food and beverage space, with the coronavirus pandemic prompting consumers to pay even more attention to what they put in their bodies. Although the pandemic reportedly forced Borden to furlough 5% of its workers, the dairy company was awarded the USDA's largest contract through its new Farmers to Families Food Box Program to supply 700 million servings of fresh fluid milk to nonprofits. However, KKR ended up selling off its brands and divisions during the next decade. Borden once had a presence in all 50 states, but as of last summer, it offered 35 products in parts of the Midwest, South and Southeastern U.S. Borden isn't alone in its struggles. Expect to be hearing more from us before long. Subscribe to Food Dive to get the must-read news & insights in your inbox. About five months after Borden filed for Chapter 11 bankruptcy, the milk giant is being auctioned off to some familiar faces. Although the company started out strong, it faced antitrust lawsuits and then watched as milk sales tumbled after the company kept prices high despite a decline in raw milk costs, hurting Dean's business. Bloomberg | Quint is a multiplatform, Indian business and financial news company. Milk companies such as Borden have struggled in recent years with competition from milk alternatives, falling milk consumption, innovative startups and deeply discounted private label offerings. They are clean, bright and excellent overall (C. 8.5/+), w/ exception of some glue stains on non-graphic backsides. (Bloomberg) -- KKR & Co. teamed up with a firm led by the former head of Dean Foods Co. to win an auction for bankrupt Borden Dairy Co., a deal that would put KKR back in the milk business. After much back and forth and a hard fought auction, bankrupt Borden Dairy was purchased by a joint venture consisting of Capitol Peak and “KKR & Co” according to the Wall Street Journal. (For the record, the WSJ in its article constantly refers to “KKR” as a lender to Borden, but – in fact – the debt is held by two BDCs which the famous investment manager co-manages with FS Investments: non-traded FS-KKR Capital II (soon to have the ticker FSKR) and publicly traded FS KKR Capital (FSK). Optimizing Food & Beverage Plant Manufacturing During a Time of Disruption, How COVID-19 is Testing and Strengthening Food Industry Supply Chains, How Food Manufacturers Are Reducing Product Recalls, Cocomels Ramps Up Innovation with Launch of New Organic Crispy Chocolate-Covered Bites, Whoa Dough Announces Reformulation and NEW Brownie Batter Bar Flavor, Guinness recalls non-alcoholic stouts amid safety fears, Coffee Battleground During Coronavirus Era Is Your Kitchen Counter. As we’ve been discussing for months, these two BDCs, the management of which KKR took over from GSO Blackstone a few years ago, have $171mn in first lien debt outstanding at cost to Borden. Tyson, Smithfield, Cargill and JBS are all looking at ways to incorporate more automation. Debt for equity swaps have been a way of life in the energy business for years, with unremarkable results for the former lenders as the industry has continued to struggle and is a mighty devourer of capital. Dive Brief: Capitol Peak Partners and KKR & Co. won a bankruptcy auction for Borden Dairy, according to reports and court filings.Borden told … Investment firms Capitol Peak Partners and KKR have teamed to win a bankruptcy auction for Borden Dairy with Prairie Farms Dairy as the backup bidder. Topics covered: manufacturing, packaging, new products, R&D, and much more. the two dairy giants if the DFA sale was rejected. comment or discuss the transaction until it is approved. Plant-based is the hottest trend in food today, and many companies are getting into the space as consumers become more interested in the health halo the products provide. That will leave many would-be buyers of distressed assets – currently raising funds as fast as they can – grinding their teeth. The debt remains rated CCR 5 – non-performing. Follow For the moment – short on gritty details and with the bankruptcy judge still needing to approve the winning bid – we are not changing any of our ratings. From oat milk to mints, Food Dive used Nielsen data to examine the growth of food and beverage segments during the last 31 weeks compared to the same time period last year. Just five months after Borden Dairy Co. announced it was filing for bankruptcy protection, the major US dairy may have a new owner. By signing up to receive our newsletter, you agree to our, Borden once had a presence in all 50 states, Capitol Peak Partners and KKR Win Bankruptcy Auction for Borden Dairy, KKR, former Dean Foods CEO win auction for Borden Dairy five months after bankruptcy filing, Meat processors expedite plans to implement robotics as pandemic increases pressure, Mars Wrigley doubles down on digital to align with shifting c-store shopping behavior, How a Monster competitor plans to be the next $1B brand in energy drinks, Consumers say snacking is a 'lifeline' during pandemic, with 88% doing it more or the same, Mondelez CEO touts growth after pandemic as CPG keeps tight focus on snacking. Like Borden. If this auction is approved, KKR would be returning to Borden's ownership. Twitter. During that time, the coronavirus pandemic added additional challenges to an already struggling category. According to … The firm did remain on as a lender over the years. Bordens Dairy Signs: Lot includes three early die-cut cardboard string hung signs for Borden company dairy products. According to the Dallas Morning News, U.S. Bankruptcy Court documents from the District of Delaware note that New Dairy Opco LLC was the winner of the auction for the majority of Borden's assets. Both Engles and KKR are familiar with the struggles facing the dairy industry today so they likely know what they are getting into with this more than 150-year old brand. Lenders like KKR/FS Investments understandably believe “anything you can do, we can do as well” and are loath to walk away from troubled situations. Engles, a former chairman and chief executive of Dean Foods, founded Capitol Peak in 2017, which is serving as the senior partner in the joint venture, while KKR is the junior partner. Gartner Report: How Resilient is Your Manufacturing Network After COVID-19? Forbes ranked him among its Worst Bosses for the Buck in 2011, averaging $20.4 million in compensation over six years while Dean's stock dropped an average 11% per year. The milk giant recently completed its bankruptcy sale where the majority of its assets went to Dairy Farmers of America for $433 million, despite antitrust concerns. What Should Retailers & Brands Consider When Planning for 2021? What seems sure is that the BDCs caught up in this bankruptcy will remain involved in the milk business for a long time yet and may yet be putting more capital to work. More details to follow, so we won’t speculate about what the ultimate impact on FSK and FSKR might be. What you need to know about e-commerce in food and grocery, Peaking inside the pod: A deep look inside Peapod's grocery delivery business. Lillianna Byington Engles does have experience taking over rival dairy companies. In January, KKR reportedly wasn't pleased when Borden decided to file for bankruptcy because it thought the companies reached an agreement to avoid that, according to court documents cited by the Dallas Morning News. Back in 2001, Suiza Foods acquired Dean Foods, its rival at the time, and Engles, who was CEO of Suiza, took over the new Dean. For the milk producer known for its "spokes-cow" Elsie to have success despite the market challenges, it will likely need a strong plan, cash and patience from its new investors to avoid ending up in the same place again. hearing to approve it is scheduled for Thursday afternoon in Wilmington, Delaware. The deal still needs approval from the bankruptcy court. Missing BloombergQuint's WhatsApp service? Dallas-based Borden Dairy Co. is expected to be sold to a new investor group for $340 million about six months after filing for Chapter 11 bankruptcy protection. Wrestling with mounting debt and struggling to adjust to consumer demands, Dean Foods filed for Chapter 11 in November. on A. KKR is a major lender to the dairy company and previously owned Borden.