Private equity firm Hoffmann Family of Companies bought Oberweis Dairy and its assets on Wednesday in a bankruptcy auction, besting an initial offer from the owner of Dutch Farms, an egg-and-dairy company based in Pullman.
Osprey Capital, the investment arm of Winnetka-based HF Companies, emerged as the winning bidder for Oberweis, known for its ice cream shops and milk in glass bottles.
Terms of the deal, pending court approval, were not disclosed but likely surpassed Brian Boomsma’s bid of about $20 million, as disclosed in previous court filings. Boomsma, owner of Dutch Farms, made a stalking horse bid to buy Oberweis in late April. A stalking horse bidder makes the first offer in bankruptcy proceedings, setting the initial price.
In April, Oberweis filed for Chapter 11 bankruptcy. It then announced the closure of its North Aurora plant with plans to lay off 127 workers starting in June.
But HF Companies co-CEO Geoff Hoffmann told the Sun-Times Wednesday that the facility “will stay open, receive numerous upgrades and hopefully expand capacity.” He could not comment on potential job cuts at the plant, but the firm plans to make it “busier than it’s ever been.”
He said Oberweis’ ice cream parlors “will absolutely stay open,” and there are no plans to cut store employees. “Expansion is fully in the strategy we are putting together” in Chicago and new markets, he added.
Oberweis opened its first ice cream shop in Aurora in 1951. The company — linked to the family of Republican state politician Jim Oberweis — has 40 retail locations in four states, including Illinois.
Wednesday’s announcement appears to end a turbulent time for Oberweis that culminated in wooing by multiple suitors. On April 23, Oberweis announced Boomsma as its new owner. But a few hours later, HF Companies announced its intention to bid for the dairy company.
Oberweis Dairy President Adam Kraber said in an April court filing that the company sought to create the best value to creditors and to preserve more than 1,000 jobs.
Kraber also detailed many challenges facing the business, including a steady drop in U.S. milk consumption and a growing appetite among consumers for plant-based, high-protein alternatives. Over the last 50 years, U.S. per capita milk consumption has halved; the trend accelerated even further between 2010 and 2019.
Oberweis has “navigated a tremendously tumultuous time in the company’s history,” Hoffmann said. “All the heavy lifting is behind us. Everything will be about prosperity and growth moving forward.”
Hoffmann said Kraber will remain in his role as president and Oberweis’ management team will stay intact.
HF Companies portfolio includes hospitality groups, wineries and restaurants. Its bid for Oberweis was driven by its “rich history dating back to 1927, [its] strong brand reputation and alignment with family values,” the firm said in a news release.
Boomsma told the Sun-Times last month that his family-owned Dutch Farms already has a bottling facility in Pullman and it could turn Oberweis around using its dairy expertise. Dutch Farms also already worked with Oberweis to distribute its products.
Boomsma said he is accustomed “to using pennies to make dollars.” Meanwhile, HF Companies has assets such as vineyards, a private jet company and resorts. The private equity firm is “all about making money,” he said. “I’ve never laid anyone off in my life. We’re about growing and doing the right thing,” Boomsma said.
Hoffmann said the investment firm is “labeled as private equity because it’s most similar. But we label ourselves as ‘family equity.’ Our goal is to be partners. We’ve sold only one business in our history. We look for companies with staying power.”
