In January, Borden Dairy Co., which was founded in 1857, filed for Chapter 11 bankruptcy protection. This week, Borden Dairy announced the start of a new chapter with Capitol Peak Partners and its affiliates acquiring substantially all Borden assets following completion of a court-supervised sale process.
Capitol Peak will assume majority ownership of the new company, and KKR, an existing lender to Borden, will be a minority investor. Following the transaction, Borden will be appropriately capitalized, and the business will remain intact, including all plants, branches, routes, and the Borden brand. The newly reorganized Borden will be able to continue employment for approximately 3,300 Borden employees and service for Borden customers.
Borden CEO Tony Sarsam said, “Despite being in the midst of Chapter 11 and a global pandemic, our team managed to generate positive cash flow, grow our customer footprint, and maintain an uninterrupted food supply to nourish American families. We are exiting Chapter 11 as a thriving company that is meeting and exceeding its performance forecasts, making our outlook very promising.”
This week, the court granted approval of the approximately $340 million sale. Upon closing of the transaction, Borden’s former controlling and majority equity holders, ACON Investments and Grupo Lala, respectively, will no longer have ownership interest in the business. Capitol Peak and KKR will establish a new board of directors.
“Borden has a rich history of partnering with America’s dairy farmers and leading retailers to provide wholesome nutrition for American consumers and families,” said Capitol Peak’s Founder and Managing Partner Gregg Engles, who brings extensive dairy industry experience as the former Chairman and CEO of both Dean Foods and WhiteWave Foods. “The Capitol Peak team is excited by this unique opportunity to work alongside KKR and build this iconic dairy company.”
Throughout its reorganization process and the COVID-19 pandemic, Borden has upheld its level of service to customers. Last month, the U.S. Department of Agriculture awarded Borden the largest contract through its Farmers to Families Food Box Program as part of the Coronavirus Farm Assistance Program. The contract enables Borden to supply 700 million servings of fresh fluid milk for free to qualifying 501(c)3 organizations across the country.
The transaction, which is subject to certain closing conditions, including the entry of a final order, is expected to be finalized in mid-July. For additional information about the Borden Dairy reorganization, visit the Borden financial website.