Arla Foods has agreed to sell its profitable Crediton Dairy milk drinks business to a management buy-out team. The sale of Crediton, which is a leading supplier of high quality British long life milk, long life cream, functional and flavoured dairy drinks and fresh bulk cream, was a condition required by the European Commission in giving approval for the merger in October 2012 of Milk Link, the British dairy co-operative, with Arla Foods amba.
The acquisition of Crediton Dairy by an experienced and ambitious management team will provide a strong platform for its future growth and development. The buy-out is being led by former Milk Link Chief Executive Neil Kennedy and former Milk Link Group Finance Director Tim Smiddy. It is being supported by a long-term, asset backed financing agreement with Lloyds Banking Group.
The proposed sale, which is conditional on the undertaking of TUPE consultation with employees (which has now commenced) and final European Commission approval, is expected to be completed by end of June 2013.
Commenting on the acquisition, Neil Kennedy said “The management team believe that Crediton Dairy is well positioned to play an important role in the fast growing and dynamic milk drinks sector. We will aim to be a highly professional and progressive business. One focused on making great tasting, high quality products with demonstrable British provenance and traceability, complemented by customer service excellence, category insight and targeted NPD. A business that has both the scale and agility to respond to the needs of customers and consumers alike and one that has strong, long term relationships with its suppliers and farmers.”
Commenting further Tim Smiddy, said “Crediton Dairy has strong growth potential based upon its self-contained, well invested manufacturing facility; growing customer base; established range of products and brands; and skilled and committed workforce. Ideally located in one of the country’s largest milk fields, the business will benefit from a milk supply agreement with Arla and in the longer term we will seek to recruit our own dedicated group of farmers.
“Moving forward, we will continue to focus on growing our retail and foodservice customer label British long life, flavoured and functional milk business. At the same time, we will build upon the success of Moo, the UK’s leading brand of long life milk; functional branded milks such as Flora pro activ; flavoured milk brands such as Mars Family Refuel chocolate milk made under a licence from Mars, and our Dairy Pride long life milk and cream foodservice brand.”