Canada’s biggest dairy processor is continuing its southward expansion by buying one of the biggest specialty and imported cheese marketers in the U.S.
Saputo on Thursday said it would buy Fairmount Cheese Holdings, the parent of specialty cheese firm DCI Cheese Co. of Richfield, Wisc., in a cash deal worth US$270.5 million.
And the deal puts Saputo in charge of DCI’s U.S. distribution and marketing of Canadian-made Black Diamond cheese, produced by rival dairy firm Parmalat Canada.
Black Diamond, founded in 1933 at Belleville, Ont., has had DCI as its U.S. agent since 1992 and has been a Parmalat subsidiary since 1997.
DCI has previously noted it built the Black Diamond brand from 100,000 pounds in 1992 to what’s now a 70 per cent share of the U.S. market for Canadian cheddar.
DCI sells and distributes specialty cheeses from a cut-and-wrap facility at Green Bay, Wisc. and a distribution centre at Carlstadt, N.J.
Apart from Black Diamond, DCI holds a substantial portfolio of import licenses for specialty cheeses from other countries, including France’s Chevrion goat cheeses, Italy’s Il Giardino and Spain’s Queso Autentico.
DCI also markets and distributes U.S. cheeses such as County Line, Great Midwest, the feta brand Nikos and Wisconsin-based Organic Creamery.
The company also makes and sells other retail products such as spreads, salsa, hummus and dips, produced at its Santa Rosa, Calif. plant.
DCI, founded in 1975 as Dan Carter Inc. and taken over by Fairmount in 2005, booked sales in 2010 about 160 million pounds of cheese, worth about US$460 million.
Montreal-based Saputo said in its release it expects to close the deal sometime next month, subject to regulatory approval.
Saputo, whose previous deals have already made it one of the top three U.S. cheesemakers, said the DCI deal will “complement the activities” of its U.S. dairy products division and boost its presence in the specialty cheese category in the U.S.