What could Biden's win mean for the CPG industry? KKR and Capitol Peak are no strangers to the struggles facing the dairy industry. Gartner Report: How Resilient is Your Manufacturing Network After COVID-19? Follow 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. Borden named Prairie Farms Dairy as a backup bidder. KKR also said the bankruptcy mostly helped another private equity backer, ACON Investments, which took a major stake in Borden in 2017. During that time, the coronavirus pandemic added additional challenges to an already struggling category. Capitol Peak is led by Gregg Engles, a former chairman and chief executive of Dean Foods. 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.
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. 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. Size: Each: 12.5 x 16 The deal still needs approval from the bankruptcy court. 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. Bordens Dairy Signs: Lot includes three early die-cut cardboard string hung signs for Borden company dairy products. Just five months after Borden Dairy Co. announced it was filing for bankruptcy protection, the major US dairy may have a new owner. hearing to approve it is scheduled for Thursday afternoon in Wilmington, Delaware. (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. When Borden filed for bankruptcy, it reportedly had roughly $250 million in secured debt, with a $175 million loan held by firms including KKR. 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. 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. Join our. Twitter. Bondholders from Borden proposed merging the two dairy giants if the DFA sale was rejected. 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.
What Should Retailers & Brands Consider When Planning for 2021? Dive Brief: Capitol Peak Partners and KKR & Co. won a bankruptcy auction for Borden Dairy, according to reports and court filings.Borden told … 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. 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. 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. The debt remains rated CCR 5 – non-performing. However, KKR ended up selling off its brands and divisions during the next decade. Lillianna Byington (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). More details to follow, so we won’t speculate about what the ultimate impact on FSK and FSKR might be. A. KKR is a major lender to the dairy company and previously owned Borden. 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. 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.
Wrestling with mounting debt and struggling to adjust to consumer demands, Dean Foods filed for Chapter 11 in November. Former CEO of … About five months after Borden filed for Chapter 11 bankruptcy, the milk giant is being auctioned off to some familiar faces. 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. . Subscribe to Food Dive to get the must-read news & insights in your inbox. The future of meat manufacturing could include 3D scanners and automated cutting. 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. 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. 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. 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. The free newsletter covering the top industry headlines, Press Release from Oregon Fruit Products. 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. 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.. Expect to be hearing more from us before long. According to … Like Borden. 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. Smart Connected Operations in Food & Bev: A Practical Guide, Food Union Innovates New Fall and Winter Ice Cream Products, Egglife Foods Announces National Distribution Partnership with Sprouts Farmers Market, Oregon Fruit Releases New Dragon Fruit Mango Fruit In Hand, The winners and losers for category sales during the first 7 months of the pandemic, Beyond Meat acquires co-packer to tackle unit costs, Stampede Meat sues New Mexico to fight plant closure order, Behind PBR's cannabis seltzer launch is infusion company Vertosa, Tyson to use own workers instead of some federal inspectors at beef plant, Capitol Peak Partners and KKR & Co. won a bankruptcy auction for Borden Dairy, according to, A joint venture between Capitol Peak and KKR is expected to buy Borden's assets out of bankruptcy. Discover announcements from companies in your industry. 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. That will leave many would-be buyers of distressed assets – currently raising funds as fast as they can – grinding their teeth.
Bloomberg | Quint is a multiplatform, Indian business and financial news company. the two dairy giants if the DFA sale was rejected. 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. Engles does have experience taking over rival dairy companies. 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.
Whether that will prove a successful approach overall remains to be seen, but the BDC Credit Reporter will keep score best we can. 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. 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. The private equity firm used what it was owed on the loan toward the Borden bid, according to The Wall Street Journal. 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”. 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. Tyson, Smithfield, Cargill and JBS are all looking at ways to incorporate more automation. 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. Topics covered: manufacturing, packaging, new products, R&D, and much more. 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. 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. 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. on They are clean, bright and excellent overall (C. 8.5/+), w/ exception of some glue stains on non-graphic backsides.