Palladium Equity Partners is exiting its investment in Castro Cheese Co. through a sale to Dairy Farmers of America, Inc. Terms of the deal were not disclosed. Palladium originally acquired Castro in September, 2007.

Castro is best known for its La Vaquita brand of cheeses. The company was founded by Maria Castro, who retired upon Palladium’s acquisition. Ricardo Alverez, a veteran of Ruiz Food Products and Juanita’s Foods, was installed as the new chief shortly after the 2007 investment, although Alberto Bandera has since assumed the CEO role.

Palladium invested in the company through its 2006-vintage, $520 million third fund, Palladium Equity Partners III, LP. The firm, which targets the US Hispanic market, has more recently been focused on new investments. In May, Palladium acquired the money transfer business of Global Payments, Inc., and last September, acquired facilities maintenance services company Capital Contractors.

In the sale of Castro Cheese Co., Lincoln International served as advisor to Palladium.

Castro and its 72 employees, will join the Dairy Farmers of America’s commercial division, the Global Dairy Products Group, which controls consumer brands such as Borden Cheese and Keller’s Creamery.