LOS ANGELES (AP) -- Investment firm OpenGate Capital said Monday that it plans to buy a Wisconsin dairy processing plant from Dean Foods Co.
OpenGate said it has signed an agreement to buy the dairy processing plant in Waukesha, Wis., which sells dairy products in grocery stores in Wisconsin, Illinois and Michigan. OpenGate will also get Dean Foods' Golden Guernsey and La Vaca Bonita brands.
Financial terms were not disclosed. The purchase will need regulators' approval. It is expected to close by the end of September.
Los Angeles-based OpenGate says it targets companies with well-known brands and solid business fundamentals that show potential for growth. OpenGate founder Andrew Nikou said in a statement that the Dean Foods purchase "meets our mark on all counts."
"Not only is the (Golden Guernsey) brand a local icon renowned since 1930 for the highest quality and freshest milk products, but its facility is very efficient, and its managers are industry experts," Nikou said. The company also said it was "eager to collaborate with the existing Waukesha management team."
Earlier this month, Dean Foods recorded a second-quarter loss after setting aside money to settle a lawsuit. Small dairy farmers had accused the company of trying to keep the price of milk low so it could pay less to the farmers; Dean Foods said it believed it had "operated lawfully and fairly." The company is also facing higher costs for raw ingredients, like its peers in the food industry.
Copyright 2011 The AP.