Saputo Inc. to Increase its Presence in the United States by

Saputo Inc. to Increase its Presence in the United States by
Acquiring Morningstar Foods, LLC 
MONTREAL, QUEBEC -- (Marketwire) -- 12/03/12 -- Saputo Inc. (TSX:SAP)
announces today that it has signed a definitive agreement to acquire
Morningstar Foods, LLC ("Morningstar"), a subsidiary of Dean Foods
Company. Morningstar produces a variety of dairy and non-dairy
extended shelf-life ("ESL") products, including creams and creamers,
ice cream mixes, whipping cream, aerosol whipped toppings, iced
coffee, half and half, value-added milks, as well as cultured
products such as sour cream and cottage cheese. These products are
manufactured under a wide array of private labels and owned brands,
and are sold nationwide through an internal sales force and
independent brokers. Morningstar serves the needs of retailers,
national quick-serve restaurant chains, grocery stores, mass
merchandisers and distributors across the United States. Morningstar
has approximately 2,000 employees and operates 10 manufacturing
facilities located in nine states. 
The purchase price for the transaction is US$1.45 billion on a
debt-free basis and will be financed through a newly committed bank
loan. The transaction is subject to customary conditions (including
regulatory approval) and is expected to close by the end of December
For the twelve months ended September 30, 2012, Morningstar had
revenues of about CDN$1.6 billion, and earnings before interest,
taxes, depreciation, and amortization ("EBITDA") of approximately
CDN$153 million. 
The transaction will be treated as an asset transaction for tax
purposes pursuant to a 338(h)(10) election. After giving effect to
the benefit related to that election, the net purchase price
represents for Saputo Inc. a multiple of 7.9x Morningstar's EBITDA. 
Saputo Inc. ("Saputo" or "the Company") expects the transaction to be
immediately accretive to earnings. After giving effect to the
acquisition, the combined business of Saputo and Morningstar for the
twelve months ended September 30, 2012, on a pro forma basis and
taking into account interest on the new bank loan, would have had
approximately CDN$8.6 billion of revenues, CDN$1.0 billion of EBITDA,
and CDN$563 million of net earnings1, representing CDN$2.82 of basic
earnings per share1 ("EPS"), equivalent to an increase of 11.5% over
the Saputo stand-alone basic EPS(1) of CDN$2.53 for the twelve months
ended September 30, 2012. 
The combined business will have approximately 12,000 employees and 57
manufacturing facilities in five countries. 
The acquisition of Morningstar will complement the activities of the
Saputo Dairy Products Division (USA). Through this acquisition,
Saputo will benefit from Morningstar's national manufacturing and
distribution footprint and will optimize coast-to-coast service. This
transaction will expand product offering to customers in the United
States and broaden the range of Saputo's future acquisition
This press release contains forward-looking statements within the
meaning of securities laws. These statements are based, among other
things, on Saputo's assumptions, expectations, estimates, objectives,
plans and intentions as of the date hereof regarding projected
revenues and expenses, the economic, industry, competitive and
regulatory environments in which the Company operates or which could
affect its activities, its ability to attract and retain customers
and consumers, as well as the availability and cost of milk and other
raw materials and energy supplies, its operating costs and the
pricing of its finished products on the various markets in which it
carries on business. 
These forward-looking statements include, among others, statements
with respect to the Company's short and medium term objectives,
outlook, business projects and strategies to achieve those
objectives, as well as statements with respect to the Company's
beliefs, plans, objectives and expectations. The words "may",
"should", "will", "would", "believe", "plan", "expect", "intend",
"anticipate", "estimate", "foresee", "objective", "continue",
"propose" or "target", or the negative of these terms or variations
of them, the use of conditional tense or words and expressions of
similar nature, are intended to identify forward-looking statements.  
By their nature, forward-looking statements are subject to a number
of inherent risks and uncertainties. Actual results could differ
materially from the conclusion, forecast or projection stated in such
forward-looking statements. As a result, the Company cannot guarantee
that any forward-looking statements will materialize. Assumptions,
expectations and estimates made in the preparation of forward-looking
statements and risks that could cause actual results to differ
materially from current expectations are discussed in the Company's
materials filed with the Canadian securities regulatory authorities
from time to time, including the "Risks and Uncertainties" section of
the Management's Discussion and Analysis included in the Company's
2012 Annual Report. 
Forward-looking statements are based on Management's current
estimates, expectations and assumptions, which Management believes
are reasonable as of the date hereof, and, accordingly, are subject
to changes after such date. You should not place undue importance on
forward-looking statements and should not rely upon this information
as of any other date.  
Except as required under applicable securities legislation, Saputo
does not undertake to update or revise these forward-looking
statements, whether written or verbal, that may be made from time to
time by itself or on its behalf, whether as a result of new
information, future events or otherwise. 
About Saputo  
Saputo produces, markets, and distributes a wide array of products of
the utmost quality, including cheese, fluid milk, yogurt, dairy
ingredients and snack-cakes. Saputo is the 12th largest dairy
processor in the world, the largest in Canada, the third largest in
Argentina and among the top three cheese producers in the United
States. Our products are sold in more than 50 countries under
well-known brand names such as Saputo, Alexis de Portneuf, Armstrong,
Baxter, Dairyland, Danscorella, Dragone, DuVillage 1860, Frigo Cheese
Heads, Great Midwest, King's Choice, Kingsey, La Paulina, Neilson,
Nutrilait, Ricrem, Salemville, Stella, Treasure Cave, hop & go,
Rondeau and Vachon. Saputo Inc. is a publicly traded company whose
shares are listed on the Toronto Stock Exchange under the symbol
(1) Before the inclusion of impairment losses on goodwill. Refer to
page 7 of the Management's Discussion and Analysis included in the
Company's 2012 Annual Report.
Sandy Vassiadis
Director, Corporate Communications
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