MONTREAL — Lino Saputo, chief executive officer and vice-chairman of the board of Saputo, Inc., made it clear on June 5 that his company’s acquisition of Morningstar Foods from Dean Foods may be just the beginning of a buying spree for the company.
“You’re asking how likely is it?” Mr. Saputo said in response to a securities analysts’ question regarding the potential for additional acquisitions. “I think it’s very likely. I think there are – in that space, and in the categories of products that Dairy Foods processes and sells, you’ve got quite a few national competitors, as well as some – and perhaps even more, regional players that could really fit our platform and be a real nice tuck-in business for us. I think there are multiple targets out there. It’s a question of finding the right one, finding one that has a desire to sell as much as we have a desire to buy them.”
Mr. Saputo made the comments during a conference call to discuss his company’s financial results during fiscal year 2013, ended March 31. For the year, Saputo saw its net income increase 26% to C$481.9 million ($466.23 million), equal to C$2.44 ($2.36) per share on the common stock, when compared to fiscal 2012.
Sales for the year rose 5% to C$7,297.7 million ($7,070 million) compared with the previous fiscal year.
“This fiscal year was highlighted by many important decisions, including the consolidation of distribution activities in the greater Montreal area, the announced closure of two Canadian plants, one in Winkler, Man., and the other in Warwick, Que., and our exit from the European market,” Mr. Saputo said. “This year was also characterized by the acquisition of Morningstar Foods, which complements our existing portfolio in the United States and will allow us to continue to develop new and existing platforms. Now known as Saputo Dairy Foods USA, this division complements the activities of our Cheese Division USA and offers increased value for customers and consumers.
“Though Saputo Dairy Foods represents a sizable acquisition, we continue to have the human and financial resources to pursue growth through acquisitions. We are ranked among the top 10 dairy processors in the world, and we believe in the importance of embracing a global perspective for long-term growth.
“As we look to the future, we remain confident in our ability to develop new platforms and new markets, mainly through acquisitions. We are always on the lookout for new ways of working more efficiently and we continuously adjust our approach to take advantage of opportunities.”
With regards to the Morningstar acquisition, the company said it provides expansion and diversification opportunities in dairy offerings to customers, as well as possibilities to further develop platforms in the United States and other countries.
“In fiscal 2014, we will continue to evaluate possible synergies stemming from the acquisition, and focus on activities aimed at improving Morningstar’s overall efficiencies,” the company said.
New products to be introduced in the United States during fiscal 2014 include Treasure Cave, a line of flavored blue cheese products; a premium line of snack cheeses; and Frigo Cheese Heads, which will feature a pairing of a beef-type product with string cheese.
For the fourth quarter of fiscal 2013, Saputo recorded net earnings of C$100.5 million, or C65c per share on the common stock. During the fourth quarter of fiscal 2012 the company recorded a loss of C$2.6 million. Sales for the quarter were C$2,053.3 million, an increase compared with C$1,703.5 million in the fourth quarter of fiscal 2012.