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Old Fashioned Foods to acquire Hansells

Auckland: 31 October 2006:

Auckland manufacturer Old Fashioned Foods (OFF) has agreed to acquire the Hansells business, creating a leading food group.

Seventy year old Hansells, a company with familiar household brand names, will be acquired by OFF for an undisclosed sum, but the combined turnover of the two businesses will see Old Fashioned Foods' total revenues increase to around the $100m pa mark for the year to March 2007.

The deal, which is still subject to certain conditions, is expected to be funded partially through debt and equity from existing shareholders. Investment bank Cameron Partners is advising the company in respect of the transaction.

Last year Old Fashioned Foods had a $6m injection of capital from Gresham Rabo's Food and Agribusiness Investment Fund 2, which enabled OFF to buy out its UK-based associate, and to expand its Auckland manufacturing plant which is due for completion in November. Gresham Rabo will provide further equity in respect of the Hansells transaction.

Old Fashioned Foods has iconic status in New Zealand, typifying its 'rags to riches' story. It began by supplying the domestic market with individually-packaged steamed puddings and desserts, based on a family fruit pudding recipe belonging to the founder's sister, 'Aunt Betty'.

In a curious twist, Hansells' New Lynn operation is the same business Old Fashioned Foods Group CEO Ross Mackenzie sold to Hansells 10 years ago before joining OFF.

"We expect excellent synergies between Hansells' baking and cooking ingredients and Old Fashioned Foods," says Mackenzie, adding that OFF's experience in dealing with supermarkets, particularly the high value private label market in the UK with supermarkets such as Tesco, will be of significant benefit to the combined operations.

Mackenzie anticipates room for expansion in Hansells' product development and says 'revitalising mature products is one of the strengths of OFF's management'.

* Hansells products are exported to Australia, Pacific Islands and Asia with new export markets currently under investigation.

* The company employs around 230 staff over two sites.

* Old Fashioned Foods:

* 30 million Aunt Betty's puddings produced each year

* Current production over 200,000 per days (can be doubled when new plant online)

* 15 million steamed puddings exported to the UK.

* Employs 90 people on its Auckland site

* The company was started by Fred Willetts, making the puddings based on the recipes of his sister "Aunt" Betty. He then enlisted the help of (current CEO) Ross MacKenzie who had been working in the grocery industry for twenty years and together they moved the business to Auckland.

ENDS

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