Bankruptcy judge OKs Hoffmann's $21.25M purchase of Midwest dairy

An Illinois bankruptcy judge has approved the sale of the Oberweis Dairy to The Hoffmann Family of Cos.’ investment arm, Osprey Capital.

The price for the Chicago-area dairy company was not immediately available in federal court records but according to Crain’s Chicago Business Hoffmann paid $21.25 million.

The court’s approval of the sale, which Hoffmann announced late Wednesday afternoon after winning a May 29 auction, hands one of the best-known dairy operations in the Midwest over to the Naples business conglomerate just shy of two months after Oberweis filed for bankruptcy protection.

In a statement issued after the sale was approved Wednesday, Hoffmann’s co-CEO Geoff Hoffmann tried to ease concerns, thanking employees and customers for “standing by us during this difficult time.”

“With new financial backing, Oberweis Dairy is poised to continue its legacy as the most trusted name in dairy and beyond,” he says.

Hoffmann also promised changes to improve the dairy's operations are coming.

Oberweis Dairy was founded in 1927 when Aurora famer Peter Oberweis began selling extra milk to his neighbors out of a horse drawn wagon.

Today it operates a dairy home delivery service across parts of the Midwest and Texas; a chain of corporate- and franchise-owned dairy and ice cream stores in the Chicago area; a distribution service to regional supermarkets; and high-end fast-food hamburger restaurants named the Burger Joint.

After a bump in its home delivery business during the pandemic, Oberweis filed for Chapter 11 bankruptcy April 13 with $4 million in debts to at least 20 creditors. It announced plans to lay off 127 employees at the time.

Hoffmann says in its statement that it has plans in place to enhance production capabilities and streamline operations at the dairy’s manufacturing facilities.

There are also plans to make improvements at “select locations” — brighter stores and expanded selections — and for the addition of new market locations in the Chicago area as well areas where Hoffmann operates.

“Notably, there are no plans to close existing locations or make substantial cuts to the business, and the Oberweis Dairy brand name will remain intact,” the company says in the statement.

The Hoffmann Family of Cos. moved to Naples in 2015 with a $75 million purchase of seven properties and a parking lot. It had four employees at the time. The family were long-time entrepreneurs and business owners who moved to the city from their homes in Illinois and Colorado.

Today, the Hoffmann Cos. owns more than 100 national brands and employs 9,000 employees with businesses located in 30 countries, according to the statement.