19 January 2009

Offer for Martine Spécialités SAS

Premier Foods has received a firm offer for its Martine Spécialités SAS (“Martine”).

Premier Foods has today announced that it has received a firm offer for its Martine Spécialités SAS (“Martine”) business from Financiere Martine SAS, a company controlled by Cerea Capital FCPR, managed by Cerea Gestion and MMF IV managed by Banexi Capital Partenaires,  for a cash-free and debt-free cash consideration of €50 million (£45.1 million)(1). Premier considers that the terms of this offer are acceptable in principle, and has therefore started consultations with employees and their representatives about this proposed transaction. If the proposed transaction proceeds, the consideration will be used to reduce the Group’s debt.

Martine is the remaining part of Premier’s Speciality Bakery Group in France and supplies retailer branded frozen patisserie products from its factory in Valade, France, primarily for the major multiple retailers in France and the UK. The business became part of the Premier Group upon Premier’s acquisition of RHM in March 2007. In the 9 months to 31 December 2007, net sales of Martine were £34.4 million and its profit before tax was £4.4 million. Martine has gross assets of £30 million and employs approximately 385 people.

Whilst Martine is a well positioned, high quality business, it is not aligned with Premier’s strategic focus on its business in the UK and Republic of Ireland. (2)

Premier was advised by Stamford Partners.

Céréa Capital is a €130 million Private Equity Fund dedicated to buyouts and transmissions in food beverage and related sectors. It acts as a majority or joint-majority private equity investor in family or managerial shareholding restructurings and in spin-off or divestment transaction opportunities offered by groups, families or other investors. Céréa Capital partners with companies' management during the transaction process and afterwards to expand the portfolio's company’s activity through organic projects or acquisition schemes aiming at profitability and strategic value growth.

Banexi Capital Partenaires (BCP) is one of the leading French players in the field of LBO transactions, replacement capital with leverage (OBO), and growth capital. Its focus is on middle market companies with sales between €20 million and €250 million. BCP offers the entrepreneur, equity investment of €5 million to €30 million, majority or minority equity solutions, complete deal structuring with an underwriting capacity of €45 million. BCP is a private equity management company approved by the French financial markets Authority (l'Autorité des Marchés Financiers - AMF), and owned by its Partners. Today, BCP manages €560 million in private equity funds.

Premier has also received a satisfactory consultation opinion from employee representatives on the proposed disposal of Sofrapain SAS (“Sofrapain”) which was announced together with the proposed disposal Le Pain Croustillant (“LPC”) on the 13 January 2009.

Robert Schofield, Chief Executive of Premier said, “The proposed disposals of LPC, Sofrapain and Martine are consistent with Premier’s strategic focus on its business in the UK and Republic of Ireland and will assist in reducing Group debt with anticipated total proceeds of approximately £50 million.”

1 €50 million is equivalent to £45.1 million at an exchange rate of £1 = €1.1075, the closing rate on 16 January 2009.

2 On excluding LPC, Sofrapain and Martine, Premier’s 2007 pro forma branded sales mix would rise from 56.6% to 60.2%.

16 January 2009

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