Overview
Founded in 1921, Oakhurst Dairy (“Oakhurst”) is the leading brand of dairy products in Northern New England. Led by three generations of the Bennett family, Oakhurst is the largest independent processor of refrigerated milk and dairy products in Maine producing from one manufacturing facility located in Portland, Maine.
Bigelow Assignment
Create a market for Oakhurst where the family shareholders and current management team could select their preferred next investor / owner.
Challenges
Demand for dairy products in the U.S. has been in decline for decades as consumers drink less milk. This has led to significant consolidation among dairy processors resulting in the emergence of a few national dairy producers. Oakhurst is one of the last high-quality, independent branded regional leaders remaining in the U.S. The Company had been approached by multiple strategic acquirers and the shareholders realized that the industry was telling them “it was time” to join a larger national entity.
As a third generation family-owned business with a strong culture of community engagement, the shareholders of Oakhurst were deeply concerned about all the stakeholders surrounding the company – its employees, management team, independent farms, customers, and community.
Who would highly value the unique history, brand, and culture of Oakhurst fostered by the Bennett Family over the previous 90+ years? Could the partner bring industry expertise, best practices, and synergistic benefits? Equally important, could Bigelow find a partner that satisfies the “soft requirements” for a successful transaction?
“We had been speaking with Bigelow for years and when we found the time was right we asked them to represent us. These types of situations are high stakes. Bigelow understood all sides of the equation and respected our family’s needs as well as the needs of the Dairy” William P. Bennett, Chairman Oakhurst Dairy
“Bigelow expertly handled the transaction negotiation and closing, but what was most important to me was that Bigelow maintained constant candid transparent communication with the non-employee family members so we had confidence in the decisions we were asked to make.” Mary Ellen Bennett Tetreau, Shareholder Oakhurst Dairy
Outcome
Bigelow focused on in-industry players as the capital intensive nature of the business combined with challenging demand characteristics made success with financial investors unlikely. After discreet conversations for over a year with the most qualified strategic acquirers, the Company was provided a choice. Not unheard of with Bigelow clients, but unusual nonetheless, the Company selected the partner exhibiting the best qualitative fit recognizing that there were other more attractive offers from a strictly economic point of view.
The acquirer, Dairy Farmers of America, Inc. (“DFA”) is a dairy marketing cooperative that serves and is owned by 13,000 dairy farmer members in 48 states. With over $12 billion in revenue and 4,000 employees, DFA is one of the country’s most diversified manufacturers of dairy products.
DFA has a strategy of acquiring local brands and runs them as separate, independent businesses. This characteristic matched perfectly to satisfy the family’s legacy and stakeholder concerns.