Dairy company Dairy Crest Group plc today (Monday) announced the acquisition of Midland Co-operative Dairies from the Midlands Co-operative Society for a cash consideration of £20m (US$36.8m) subject to a working capital adjustment.
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Midland Co-operative Dairies is the largest regional dairy operator in the UK. It processes approximately 200m litres of milk a year at its dairy in Birmingham and distributes fresh milk, via 16 distribution centres to a range of retail, wholesale and
doorstep customers across the midlands. Milk is sourced from 285 dairy farms
located across the region.
As at 22 January the value of the fixed assets being acquired were £6.4m. In the year ended January 2005 MCD made operating profits before central overheads of £0.6m on sales of £89m.
MCD will be consolidated into Dairy Crest’s existing dairy operations and it is anticipated that, subject to employee consultation, the Birmingham dairy processing plant will be closed in due course, Dairy Crest said. Milk processing will be transferred to Dairy Crest’s existing dairies. In addition it is expected that three of the distribution depots at Oxford, Farringdon and Thame, where there is overlap with Dairy Crest’s existing depot network, will also close.
“There has been significant consolidation amongst fresh milk processors over the
last few years reflecting the challenging market conditions,” said Drummond Hall, chief executive of Dairy Crest Group plc. “Dairy Crest has been one of the prime consolidators in this process. The integration of Midland Co-op Dairies into our own dairy operations will generate significant efficiencies as well as strengthening our customer base in the Midlands region.”
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By GlobalData“This, together with the recent acquisition of the Starcross Foods dairy in Derbyshire, extends our geographical footprint northwards and re-establishes Dairy Crest’s position as one of the leading players in the fresh milk market,” he said.
