Danone, the French producer of yogurts, bottled water, and infant-nutrition products, has announced that it will sell its Horizon Organic and Wallaby organic-dairy businesses in the U.S. to investment firm Platinum Equity. The deal comes as part of a portfolio review initiated in 2022 by Danone's CEO, Antoine de Saint-Affrique, with the aim of boosting sales growth and profitability.
The Horizon Organic and Wallaby brands were acquired by Danone in 2017 as part of its $10.4 billion deal for U.S. organic-foods producer WhiteWave Foods. However, the company has since considered selling its underperforming portfolio, including its organic dairy activity in the U.S.
The dairy products offered by these brands, which include creamers & whiteners, cheese, butter, milk, and yogurt, accounted for approximately 3% of Danone's global revenue. They had a dilutive impact on the company's like-for-like sales growth and recurring operating margin. In 2022, Danone reported global sales of 27.66 billion euros ($30.56 billion).
Danone's CEO stated that the sale will allow the company to focus more on its current portfolio of strong, health-focused brands and reinvest in its growth priorities. Following the completion of the sale, Danone will retain a minority stake that won't be consolidated into its results. The sale is subject to customary conditions.
Platinum Equity, the investment firm acquiring Horizon Organic and Wallaby, expressed confidence in the potential of these brands. With its carve-out experience and operational expertise, Platinum Equity aims to further enhance their growth. The firm's portfolio already includes successful companies such as Biscuit International, Fantini Group Vini, and Iberconsa.
Adam Cooper, Managing Director at Platinum Equity, highlighted the increasing demand for premium offerings in the dairy-milk category, particularly organic and value-added products. Horizon Organic, being a pioneer in this segment, is well-positioned to benefit from this trend.
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