Milcobel to sell subsidiary Ysco to Davidson Kempner Capital Management

BELGIUM – Belgian dairy cooperative Milcobel has announced its intention to sell its subsidiary, ice cream producer Ysco, to Davidson Kempner Capital Management.

The planned transaction is aimed at providing Ysco with the necessary capital and strategic focus to establish itself as Europe’s leading private-label ice cream producer.

The sale, pending approval from relevant competition authorities and the French Ysco Works Council, is expected to yield several benefits.

Milcobel plans to return part of the proceeds to its member dairy farmers, facilitating targeted investments to increase capacity and optimize dairy production processes.

Additionally, reducing debt is anticipated to lower financial costs, potentially leading to higher milk prices for farmers. The cooperative is also exploring partnerships to further strengthen its dairy operations in the future.

“Under Milcobel’s ownership, Ysco has grown into a major player in the European private-label ice cream market,” Peter Grugeon, CEO of Milcobel, noted.

“If the transaction is approved, we are confident that Davidson Kempner and Afendis will provide the focus and capital needed to accelerate Ysco’s further growth and enable it to seize opportunities in a dynamic and consolidating ice cream market.”

Grugeon emphasized that the proceeds would benefit Milcobel’s member dairy farmers and support the cooperative’s efforts to enhance the value of its dairy activities and partnerships.

The transaction would also allow Milcobel to concentrate on its consumer cheese business and premium dairy ingredients.

Founded in 1949, Ysco specializes in private-label ice cream for European retailers and operates production facilities in Belgium and France.

The company distributes up to 190 million litres of ice cream annually, supplying nearly all major European supermarket groups. Ysco claims to be Europe’s second-largest private-label ice cream producer.

Despite the growth in the private-label ice cream market, which has an average annual growth rate of 5%, the industry is experiencing significant consolidation.

Ysco reported losses of 11.6 million euros last year, attributed to rising costs and a problematic ERP implementation.

Consequently, Milcobel is seeking to exit the ice cream industry and refocus on its core dairy business. Earlier this year, the cooperative underwent a reorganization, resulting in the loss of 130 jobs.

The transaction is expected to provide Ysco with the capital and capacity to pursue further development and solidify its position as one of Europe’s leading ice cream producers.

Davidson Kempner, a global asset manager with approximately US$38 billion in assets, will support Ysco’s growth ambitions.