Canadian dairy giant Saputo Inc., keen on expanding in the U.S. market, has struck a US$160-million deal to acquire Wisconsin cheese maker Alto Dairy Co-operative.
Alto had annual sales of about US$378 million in 2007 and operates two plants in Waupun and Black Creek, Wis., with a total of 467 employees.
The sale, endorsed by Alto’s board of directors, is still subject to U.S. antitrust vetting and approval by the co-operative’s members at a meeting Feb. 27.
Alto produces Italian-style cheeses—mozzarella and provolone—and American-style cheeses, cheddar varieties, Monterey Jack, Muenster, Fontina and Gouda, which are sold nationally under a variety of brand names and private labels.
Manon Goudreault, a spokeswoman for Saputo Inc., said the company was contacted by Alto about making a deal.
“They were looking to sell their activities,” she said. “This transaction is really part of our strategic orientation and it will help us to expand our core business in the U.S.”
“It will also help us to grow in the U.S. and to get a stronger presence.”
Saputo has 15 plants in the United States, including in Wisconsin and California.
Goudreault said Alto is a good fit because its main products are mainly Italian-style and American-style cheeses, which Saputo already produces.
Saputo is one of the top 20 dairy processors in the world, the largest dairy processor in Canada, among the top five cheese producers in the United States, the third-largest dairy processor in Argentina and the largest snack-cake manufacturer in Canada.
The Alto deal is viewed as a positive move by analyst Jessy Hayem of Desjardins Securities.
“It should aid Saputo in achieving a stronger presence in the U.S.,” she said. “Saputo should be able to draw synergies, given its existing presence in Wisconsin.
“We believe that some plant rationalization may ensue and economies of scale could be gained, over and above the attainable production of efficiencies.”
