Wimm-Bill-Dann Expands - Analyst Blog

Wimm-Bill-Dann Foods OJSC (WBD), a Russian dairy and juice company,  recently announced that it has acquired one of the leading and technologically advanced dairy plants in the Perm region. Completion of the deal is subject to the Russian Federal Antimonopoly Service approval. Financial terms of the transaction were not disclosed.

Wimm-Bill-Dann believes that the acquisition of Kungur Dairy Plant in Perm region is in sync with its growth strategy. In November 2010, the Moscow based company also purchased Moloko Isilkulya, one of the fastest growing dairy producers in Western Siberia (Omsk Region).

We anticipate that the deal will increase Wimm-Bill-Dann's market share and strengthen its  brand awareness as the newly acquired dairy plant has easy access to raw materials in the region and a strong customer base. Advanced production automation at the Perm region facility also helps in producing high quality products.

Wimm-Bill-Dann also announced in December that PepsiCo Inc. (PEP), one of the world's largest food-and-beverage companies, has agreed to buy a 66% controlling stake in the company for $3.8 billion. This deal will bring tremendous growth opportunities to Wimm-Bill-Dann and make PepsiCo the biggest food-and-beverage company in Russia.

At the end of the third quarter, Wimm-Bill-Dann had cash and cash equivalents of $41.2 million and shareholders' equity of $727.4 million. During the quarter, long-term loan was $360.2 million versus $286.0 million in fiscal 2009.

Wimm-Bill-Dann currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain our long-term Neutral recommendation on the stock.

Founded in 1992, Wimm-Bill-Dann is the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the Commonwealth of Independent States. The company has 38 manufacturing facilities in Russia, Ukraine, Central Asia and Georgia.