DALLAS (CBSDFW.COM/AP) – Dean Foods Co. announced Monday that it has acquired the ice cream manufacturing and retail business from the Friendly’s restaurant chain for $155 million. Then, on Tuesday, the Dallas based company reported a first-quarter net income of $39.2 million, after reporting a loss in the same period a year earlier.
Dean Foods Co. will continue to manufacture ice cream and novelty ice cream products in Wilbraham, Massachusetts.
Friendly’s ice cream is distributed to more than 8,000 grocery stores and retailers across the United States and has seen 105 percent growth in retail business over the past five years. There are more than 260 Friendly’s restaurants, which hey will continue to be owned by an affiliate of Sun Capital Partners Inc. with no management changes.
“Today marks a new chapter for Friendly’s retail and manufacturing ice cream business,” Friendly’s CEO John Maguire said in a Monday statement. “Dean Foods Co. has recognized the growth momentum that Friendly’s retail ice cream has experienced over the last five years and I am thrilled that Dean Foods will be the ongoing steward of the retail ice cream business, led by the current experienced retail and creamery teams.”
Friendly’s was founded in 1935 in Springfield, Massachusetts. Dean Foods Co. is the nation’s largest direct-to-store distributor of milk and other dairy products.
On a per-share basis, Dean Foods Co. said that it had a first-quarter profit of 43 cents. Earnings, adjusted for one-time gains and costs, came to 45 cents per share. Those results topped Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 38 cents per share.
The milk company posted a revenue of $1.88 billion in the period, which met Wall Street forecasts. Dean Foods expects to see second-quarter earnings in the range of 32 cents to 40 cents per share. The Friendly’s transaction is also expected to close late in the second quarter, subject to regulatory approvals.
Dean Foods shares have increased 6 percent since the beginning of the year. The stock has climbed 14 percent in the last 12 months.
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