- ACON Investments said in a statement it has completed an equity recapitalization of Borden Dairy, one of the leading fresh fluid dairy processors in the United States. Financial terms of the deal were not disclosed.
- Borden, which makes milk, cream cheese, cream, juices and other products, was spun-off from a multinational conglomerate in 2013 into a private company called Laguna Dairy. Following the investment by ACON, Laguna Dairy remains a substantial equity holder in Borden.
- "Dairy is a dynamic segment and Borden is well positioned to capitalize on a wide range of exciting opportunities," Adam Kriger, who has served as an ACON consultant and has joined Borden's board, said in a release.
Borden, a dairy company founded 150 years ago, is among the more well-known companies in the space. But despite its longevity, the dairy processor is not immune to the growing challenges facing food and beverage companies. While little is known publicly about Borden's finances, the corporate overhaul could give the business a more stable platform from which to grow its operations. Borden did not disclose how much money was involved in the recapitalization.
The dairy space is facing a number of challenges, including consumers turning to cleaner labels, fluctuations in the commodity market and growing competition from "milk" made from plants, almonds and soybeans. Mintel has estimated that U.S. non-dairy milk sales grew 9% in 2015, while dairy milk sales declined 7% during the same period. The threat has forced big dairy companies to respond. Dean Foods acquired a minority stake in Good Karma Foods, a manufacturer of non-dairy milk and yogurt, in May. Danone also spent $12.5 billion to purchase WhiteWave, giving it a premier position in soy and plant-based products popular with American consumers.
Borden remains largely focused on traditional dairy products and could benefit from diversifying. The company now has the benefit of navigating these uncertain waters away from the close eye of Wall Street with the deep pockets of a private equity investment firm. Borden was smart to take advantage of an investor that could help it improve its business through a number of possibilities, including stabilizing its finances, modernizing equipment and plants, or expanding into new products.