Dean Foods to return $2 billion to shareholders

by Staff
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DALLAS — Dean Foods Co. announced plans to return $15 per share to shareholders as part of a one-time special cash dividend totaling around $2 billion.

The special dividends are being financed through a recapitalization of the Dean Foods’ balance sheet through $4.8 billion in new senior secured credit facilities.

"Dean Foods is an organization with strong momentum as reflected in our 2006 results and positive outlook for 2007," said Gregg Engles, chairman and chief executive officer. "Over the past several years we've consolidated the industry and developed a leading market position through significant strategic acquisitions and investments in building out our branded portfolio. With this platform in place, we are now entering the next phase of our evolution. Over the next few years, we will be focused primarily on leveraging our scale to drive internal growth through maximizing productivity and efficiencies across our business."

Mr. Engles went on to say the decision was made to increase the Dean Foods’ exposure to the debt market and return equity capital to shareholders while allowing them to participate in the company’s future growth.

The dividends will be payable on April 2 to shareholders of record as of March 27. The total size of the dividend depends on the number of shares outstanding on March 27. Based on records current on Feb. 23, Dean Foods had $128.95 million shares outstanding, which calculates to a total dividend of $1.93 billion.

"After a thorough analysis, we have targeted an initial leverage level that we believe is a prudent and efficient use of our balance sheet while preserving flexibility to meet our capital needs and growth objectives, including pursuing highly compelling tuck-in acquisitions," said Jack Callahan, executive vice president and chief financial officer.



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