Danone sells Horizon Organic to a California private-equity firm

Horizon Organic, one of the first national organic dairy brands in the United States, has been sold to a private equity firm, Platinum Equity and Danone recently announced.

The terms of the deal were not revealed. Danone announced a year ago that it would be looking at strategic options, even a sale, for its U.S. organic dairy brands, according to Reuters. Wallaby, which makes an Australian-inspired Greek yogurt, was included in the sale.

“As part of our Renew Danone strategy, we committed to a portfolio review and asset rotation for businesses that fell outside our priority growth areas of focus to drive value creation,” Danone CEO Antoine de Saint-Affrique said in a statement announcing the sale. “Today marks an important milestone in delivering this commitment while giving the Horizon Organic and Wallaby businesses the opportunity to thrive under new leadership.”

Horizon Organic introduced organic milk available across the country in 1991. Its portfolio of organic dairy products includes milk, creamers and whiteners, yogurt, cheese and butter.

"Horizon Organic is an iconic name in dairy that is well recognized and beloved by consumers," Platinum Equity Co-President Louis Samson said in a separate statement. "The brand has earned a reputation for quality and innovation that is unmatched in the industry. We appreciate Danone's confidence in our ability to build on that legacy and support Horizon Organic's growth as a standalone company." Platinum Equity specializes in mergers, acquisitions and operations in a broad range of business markets. The California-based firm has completed more than 450 acquisitions since 1995, when it was founded by Tom Gores.

Related:With $12.5 billion WhiteWave deal, Danone gains solid standing in natural and organic

The U.S. dairy category is estimated at $68 billion with milk comprising approximately $17 billion of that total. Horizon Organic and Wallaby accounted for 3% of Danone’s global revenue in fiscal 2022, according to Danone.

"Premium offerings, including organic and value-added products, are driving the growth in the dairy milk category," said Platinum Equity Managing Director Adam Cooper. "Horizon Organic is a pioneer of that segment and is in position to continue capitalizing on and accelerating the trend.

"We are excited about Horizon Organic's potential as an independent business with a renewed sense of focus and a commitment to investing in its success," said Cooper. "We have a lot of experience supporting food and beverage businesses. We look forward to partnering with Horizon Organic's management team to ensure a seamless transition and chart a path for continued growth and expansion."

Related:Horizon Organic commits to becoming carbon positive by 2025

The proposed acquisition of Horizon Organic and Wallaby is subject to customary closing conditions and regulatory approval.

Horizon Organic’s been acquired before

Mark Retzloff founded Horizon Organic Holding Corp. in 1991 and left in 2001; he later launched Aurora Organic Dairy in Platteville, Colorado, New Hope reported. Dean Foods Company completed its purchase of Horizon Organic in January 2004, acquiring the 87% it did not previously own for $216 million cash and the assumption of $40 million in debt, according to the Institute for Agriculture & Trade Policy.

Dean Foods reorganized its branded businesses—WhiteWave Foods, which created Silk soymilk in 1996, Horizon Organic and the Dean National Brand Group—in spring 2008, with WhiteWave founder Steve Demos leading the new division, New Hope Network reported.

After WhiteWave Foods separated from Dean Foods in 2012 to become a stand-alone company, it acquired organic produce brand Earthbound Farms in 2014; So Delicious, the maker of dairy-free frozen desserts, yogurt alternatives, plant-based milks and creamers, in September 2014; Vega, a plant-based nutrition company, in 2015; and Wallaby Yogurt Company in August 2015, according to New Hope Network and The Denver Post.

The acquisitions and sales growth pushed WhiteWave to its first $1 billion revenue report in the third quarter of fiscal 2015. In the spring of 2017, French dairy giant Danone purchased WhiteWave Foods for $10 billion. (Read Rick Polito’s analysis.) DanoneWave, which eventually became Danone North America, kept two headquarters: Broomfield, Colorado, and White Plains, New York. Danone North America received B Corp certification in 2018.