The deal adds to the company’s growing list of ice cream brands, which also includes Mayfield and Dean’s Country Fresh. The company's 2015 ice cream net sales totaled nearly $1bn.
Friendly's Ice Cream, with $166m in net sales in 2015, produces packaged ice cream and other frozen dessert products to over 8,000 US retail locations.
The acquisition of the Friendly's Ice Cream (FIC) manufacturing and retail business is expected to be immediately accretive to margins and earnings, and Dean Foods expects that the acquisition will add approximately $0.06 earnings per share accretion in 2016.
Mutual growth interests
AS the third largest US ice cream brand, Dean Foods believes the acquisition will boost its position in the ice cream market.
“Friendly's fills a manufacturing and retail ice cream void in our nationwide footprint," Dean Foods CEO Gregg Tanner said.
Friendly’s Ice Cream also believes its brand will benefit under new ownership.
"This agreement is the result of 105% growth of our retail business over the past five years, as well as the successful repositioning of our restaurant business," said John Maguire, CEO of FIC Restaurants. "Dean Foods possesses the growth capabilities and expertise to take the Friendly's retail ice cream business to the next level of its meteoric rise."
Led by its current retail and creamery teams, the Friendly's Ice Cream business, under the ownership of Dean Foods Company, will continue to operate out of the facility in Wilbraham, Massachusetts.
The North Atlantic facility currently produces Friendly's packaged ice cream and frozen dessert products, including single-serve sundae cups, cakes, and rolls, along with ice cream for Friendly's restaurants.
Further brand acquisition
In addition to acquiring Friendly's manufacturing and retail ice cream business, Dean Foods is acquiring the Friendly's trademark as well as all intellectual property associated with the ice cream business.
Friendly's Restaurants, a family-dining restaurant chain with more than 260 locations in the US, will continue to be owned and operated by an affiliate of Sun Capital Partners, Inc. and will license use of the Friendly's trademark under license and supply agreements entered into as part of the transaction.