With the purchase of Humboldt Creamery, Foster Farms Dairy now holds a significant position in the organic milk market.
The sale includes Humboldt Creamery's Fernbridge processing plant and a frozen distribution center in Stockton, Calif. The sale is believed to be near $20 million.
Officials of the Modesto, Calif.-based Foster Farms were not immediately available for comment, but a Humboldt spokesman, who refused to give his name, said the sale is a positive move for Humboldt, a company that had struggled in recent years and filed chapter 11 bankruptcy in April.
"This is a positive move that makes us bigger and stronger," he said. "We think Humboldt will be even healthier and can expand under Foster."
In a prepared statement, Len Mayer, Humboldt Creamery's acting CEO said the acquisition is "a very good step for farmers, employees, customers, suppliers and the community at large."
Prior to Humboldt's bankruptcy filing, its CEO Rich Ghilarducci resigned in February. The matter is under investigation by the FBI, the company spokesman said.
Humboldt Creamery was put up for sale shortly after filing for bankruptcy on April 22. The sale to Foster Farms is expected to close in the coming days.
Founded in 1929, Humboldt Creamery is owned by the oldest independent dairy cooperative in California and specializes in organic dairy farming.
Foster Dairy Farms is family owned and has been operating in California since 1939. It produces a variety of milk products.