J R Simplot and Besnier sign Letter Of Intent

COMPANY PRESS RELEASE: The J. R. Simplot Company and the Besnier Group have signed a letter of intent whereby Besnier will acquire Simplot Dairy Products, Inc., a cheese producer with operations in Idaho, Wisconsin, and Washington.

Besnier (pronounced Ben-Yea) is a family-owned, privately held company established in 1933. Based in Laval, France, it is the largest dairy company in the European Union, processing more than 14 billion pounds of milk a year. It is engaged in all aspects of the dairy business including fluid milk, cheese, yogurt, cream, and industrial dairy products. Besnier has annual sales of $5.5 billion with 85 plants and 14,000 employees worldwide.

Simplot Dairy owns and operates the Swiss Village cheese plant at Nampa, Idaho, as well as plants at Arpin, Wisconsin; Lacey, Washington; and Salmon, Idaho. The four facilities, all of which will be acquired by Besnier, employ a total of 720 people.

Paul Bensabat, Chief Executive Officer for Besnier U.S.A., Inc., said the Simplot Dairy Products acquisition is consistent with his company's strategy to expand its U.S. operations.

"This is an opportunity to move into Idaho, which is among the fastest growing dairy states," said Bensabat. "It will also enable us to expand the variety of cheeses we can offer customers by adding cheddar, jack, blue, and cream cheese to our product line."

Bensabat said all four Simplot Dairy plants will continue to operate at present employment levels. He said it is highly probable that operations at the Nampa plant will be expanded assuming continued growth in the area's milk supply.

Other than France, the United States is Besnier's largest market with annual sales exceeding $550 million. Its Sorrento and Precious brand cheeses are the nation's leading retail soft Italian cheese labels. It also markets a variety of specialty cheeses under the President retail label, and supplies various cheese products to the foodservice industry.

Besnier, which established U.S. operations in 1978, now employs more than 1,000 people at six plants in New York, New Jersey, Wisconsin, and California. Its first plant, at Belmont, Wisconsin, was completely rebuilt at the same location in 1996 and is the only new plant constructed in that state in the past 10 years.

Steve Beebe, Simplot Company President, said the sale of the dairy products subsidiary will enable Simplot to focus financial and management resources on its core businesses.

"The dairy industry is in consolidation, and we have elected not to invest the capital which would be necessary to compete long term. We prefer to spend those dollars in other parts of the company more closely aligned with our strategic direction and where we see significant opportunity," said Beebe.

Simplot is also a privately held company. The agribusiness firm employs 12,000 people in the U.S., Canada, Mexico, and Australia, and has annual sales of nearly $3 billion. Its core businesses are potato and vegetable processing, agricultural fertilizer manufacturing, cattle feeding and farming.

Simplot entered the dairy products business in 1990 with the acquisition of Swiss Village cheese which had plants in Nampa and Salmon, Idaho. An expansion of the Nampa plant in 1993 increased milk processing capability from 400,000 to 1.7 million pounds per day, and subsequent expansions have brought capacity to nearly 2.2 million pounds per day. The Arpin, Wisconsin, cheese plant was purchased in 1991, and Olympia Cheese of Lacey, Washington, was purchased in 1994. The four plants produce about 150 million pounds.