Dean Foods buys soymilk maker

Dean Foods, the largest dairy processor in the US, has agreed to pay $189 million for the 64 per cent stake it does not already own in White Wave, which makes Silk refrigerated soymilk.

The agreement also resolves a lawsuit between White Wave and Dean Foods over Dean's option to buy the remainder of the smaller company.

Separately, Dean Foods said its net income fell 64 per cent in the first quarter, largely because of a change in accounting for the value of brand trademarks it has acquired. The results did however beat Wall Street expectations.

Dean Foods earned $8 million (€8.75 million), or 12 cents per share, in the January-March period compared to $22 million, or 38 cents a share, last year. Revenue rose to $2.28 billion from $1.47 billion, reflecting a major acquisition last year.

The company said pro forma earnings, excluding costs for plant closings and writing down trademark values under new accounting rules, were $56 million, compared to $31.3 million a year ago.

Gregg Engles, chairman and chief executive of Dean Foods, said soymilk could be one of the fastest growing lines in the food and beverage industry.

Including its current stake, Dean Foods will have paid $204 million for White Wave. Dallas-based Dean Foods said the purchase would have no effect on earnings in the first year.

White Wave had sales of about $125 million in the twelve months ended March 31, the companies said.

Engles said the deal was structured to keep White Wave's management in place. Steve Demos, founder and president of the company, will keep that title under Dean Foods, the companies said.

White Wave was founded in 1977. It makes company-branded and private-label dairy products such as milk and milk-based beverages, ice cream, yoghurt and coffee creamers.

The current Dean Foods was created last year when a company Engles started in 1988 and built through acquisitions, Suiza Foods, bought the more established Dean Foods and took over its name.