CASE STUDY: HP Hood & Maola Local Dairies
HDC Strengthening Pennsylvania’s Dairy Industry with Recent Sale of HP Hood Processing Facility
Dairy plays an integral role in Pennsylvania’s economy. The state has the second-largest number of dairy farms in the country and ranks eighth in total milk production. Employing more than 47,000 individuals and contributing nearly $12 billion to the state’s economy, the impacts of any development within the industry ripple throughout the state.
Recently, HP Hood finalized a transaction that completed the sale of the company’s Philadelphia, PA, extended shelf-life UHT dairy processing factory, which produces coffee cream, half & half, and other extended shelf-life dairy products. This deal, brokered by Harry Davis & Company (HDC), is significant for the region’s dairy industry. The buyer, Maola Local Dairies, owned by the Maryland & Virginia Milk Producers Cooperative Association (MDVA), is a family-owned farm cooperative with farms across Pennsylvania, North Carolina, Maryland, and Virginia. However, 80% of the company’s farms are located within Pennsylvania, making this transaction especially important for PA dairy producers.
When HP Hood approached HDC to broker this transaction, it was seeking to test the market and understand the appetite for this type of facility. In search of the right price and buyer, HP Hood was looking to sell for continued operations. If the right buyer wasn’t found, the company would have continued to operate the facility.
After several successful engagements with HDC, HP Hood sought its services once again, recognizing that finding a solution required an expert team with knowledge of the dairy processing market. And, since HP Hood started with a plan of only testing the market, maintaining a confidential marketing process was of the utmost importance. HP Hood knew they could count on HDC. to develop a confidential customized marketing campaign that would target and leverage the right prospective buyers.
With Maola Local Dairies on board to purchase the facility, the plant would retain the 170 workers employed at the facility before the acquisition. Of these employees, 160 are union members. Even more promising is MDVA’s intention to invest in the plant to increase capacity over the next two years–from its current capacity of 10 million gallons to 25 million gallons.
Pennsylvania Governor Josh Shapiro was in firm support of this transaction as it is anticipated to bolster the PA dairy industry. Viewing agriculture as a valuable opportunity for the economy, the sale and eventual expansion of this facility is a boon for local dairy farmers looking for more processing capacity waiting to come online.
The success of this venture was built on HDC’s history spanning more than 70 years. Evolving from auctions to include valuations and mergers and acquisitions, we’ve built a reputation as a leader in the dairy, food, and beverage industries, trusted by many Fortune 500 companies and major financial institutions. Our combination of industry knowledge, relationships, and expertise enables us to create the right solution for our clients.
HDC’s engagement did not end at the letter of intent, as we continued to work with HP Hood and MDVA to provide a seamless transition of the property and manufacturing. We led weekly calls with C-level personnel, legal teams, and operations personnel to support both parties, ensuring a successful sale facility transition. From the beginning of our engagement with HP Hood, we were able to identify a buyer in mere months and the process took just over a year from start to finish.
“Harry Davis & Company delivered an outstanding result in brokering the 2024 turnkey sale of our Philadelphia ESL facility to MDVA’s Maola Local Dairies. It’s complicated to sell an operating dairy facility but as we anticipated, Harry Davis & Company leveraged their relationships and expertise to navigate the pathway to a successful closing. Their expert negotiation and professional communication exceeded our expectations in this transaction from start to finish. Whether it’s a production line or complete facility, we continue to rely on Harry Davis & Company to deliver industry leading results for our surplus assets.”
– Gary Kaneb, CEO, HP Hood
Going beyond a standard broker engagement, our team works closely with each client to ensure they obtain the maximum value for their assets. This recent HP Hood transaction demonstrates how our specialized dairy industry knowledge can be leveraged to deliver value to all stakeholders, from buyers and sellers to the employees and local communities at the facility being sold.
If you’re looking to learn more about how HDC can help you navigate the current auction, valuation, or merger and acquisition landscape within the food and beverage industry, contact us today to speak with our experienced team. ■