Dean Foods (DF) sold Morningstar for $1.45 Billion. “Dean Foods expects to realize $887 million in proceeds, net of taxes and expenses.” It will use all the proceeds to pay down debt. “Dean Foods’ management expects its net debt to EBITDA ratio to be below 3.0x at year end 2012.”
I actually sold my position on DF below $17 at a loss because I got scared of the volatility of WhiteWave. Today, it is up trading at $17.55. I expected them to pay some of the proceeds to pay a special dividend, but it looks like that is not happening. This changes a bit of my valuation on the lower side because Dean gets a low multiple of FCF.
I expect the stock to trade around this price for a while. I will revisit this stock when they actually distribute the WhiteWave shares to shareholders.
Disclosure: I do not own Dean.