Premier Foods Regulatory News (PFD)

Premier Foods plc("Premier Foods" or the "Group")

PROPOSED SALE OF SWEET SPREADS AND JELLIES BUSINESS TO HAIN CELESTIAL FOR £200 MILLION

Premier Foods announces that it has reached a conditional agreement to sell its sweet spreads and jellies business, including the Hartley's, Robertson's, Frank Cooper, Keiller, Gales and Sun-Pat brands, to The Hain Celestial Group, Inc. [NASDAQ:HAIN], for a cash and share consideration of £200 million. The sale is subject to approval by Premier Foods' shareholders and consent from Premier Foods' banking syndicate and is expected to complete by the end of October 2012.

This sale represents the third divestiture the Group has announced this year following agreement on its new financing arrangements in March 2012, and continues its strategy of prioritising investment behind its Power Brands and divesting selected, non-core businesses.

The sale includes Hartley's, Britain's most popular jam and a category leader in jelly-to-make and ready-to-eat jelly, and a portfolio of marmalade brands in Robertson's, Frank Cooper, Keiller and the licence for Rose's marmalade. Also included in the sale are Sun-Pat, the leading brand of peanut butter in the UK, Gales, the UK's number two brand in honey and significant private label and business-to-business sales. The products are predominantly manufactured at the Group's Histon factory, near Cambridge, which will also be sold to Hain Celestial as part of the agreement. All employees at the site, with the exception of a number of Group employees, are expected to transfer to the buyer following an appropriate consultation process.

Commenting on the sale, Michael Clarke, Chief Executive Officer of Premier Foods, said:

"This divestment is a major step forward in our strategy to simplify the business and focus on our Power Brands. Following completion of this sale, we will have raised around £275 million of the £330 million disposal proceeds that we committed to achieving by June 2014. This will represent a 22% reduction in our net debt since the Half Year.

Our sweet spreads and jellies business was not core to Premier Foods and our employees in this business will benefit from being part of an international company that is committed to investing in, and growing, these categories." 

Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial commented:

"In order for Hain Celestial to become the largest healthy food company in the United Kingdom, we needed to expand into Ambient Grocery where we have seen health and nutrition gain traction with consumers. The acquisition of the Premier Foods brands furthers our goal to expand in the United Kingdom with the addition of ambient grocery products. Key to the success will be the experienced workforce and management at the Histon facility who we look forward to working with."

Transaction highlights

·; The proposed transaction includes the Histon site, the production, distribution, sales and marketing of the Hartley's, Robertson's, Frank Cooper, Keiller, Gales and Sun-Pat brands, the licence to produce and distribute Rose's marmalade and significant private label business and business-to-business sales. 

·; Consideration of £200 million is payable on completion and is subject to an adjustment for the value of inventory transferred at completion and other relevant adjustments.

·; The consideration will be satisfied by £170 million in cash and the issue of shares in Hain Celestial with a value of at least £30 million at completion.

·; The proceeds of the sale of the business will be used to pay down debt.

·; Premier Foods and Hain Celestial have entered into a co-packing agreement pursuant to which Premier Foods will continue to manufacture Hartley's jelly crystals at its Knighton site for a period of at least 12 months. Hain Celestial will supply jam to Premier Foods for use as an ingredient under the terms of a supply agreement.

·; Premier Foods and Hain Celestial have entered into transitional services arrangements to facilitate the smooth transfer of the business.

For the year ended 31 December 2011, sales of the sweet spreads and jellies business were £165.0 million, of which 59% were branded sales. EBITDA3 for the year ended 31 December 2011 was £38.3 million and Trading profit was £36.1 million. The gross assets of the business being sold were £161.0 million as at 30 June 2012. As previously announced, the Group expects to deliver further overhead cost reductions in 2013 which will offset any initial earnings dilution from this transaction.

A circular will be sent to shareholders in due course giving details of the proposed transaction and notice of a general meeting at which a resolution to approve the divestiture will be proposed.

This announcement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities

-Ends-

For further information, please contact:

Premier Foods plc 01727 815 850

Lisa Attenborough, Director of Communications

Richard Godden, Head of Investor Relations

Maitland 020 7379 5151

Tom Buchanan

Brian Hudspith

Notes to editors:

1. The Hain Celestial Group, headquartered in Melville, NY, is a leading manufacturer of natural and organic foods and personal care products in North America and Europe. Hain Daniels Group, a company wholly owned by Hain Celestial, was established in October 2011 following the acquisition of The Daniels Group. Hain Daniels makes and sells fresh food and drinks in eight chilled and frozen categories under the New Covent Garden Soup Co. ®, Johnson's Juice Co. ®, Linda McCartney®, Farmhouse Fare® and Lovetub® brands. Hain Celestial has been providing "A Healthy Way of Life™" since 1993. For more information, visit www.hain-celestial.com.

2. Premier Foods is being advised by Spayne Lindsay & Co. LLP.

3. EBITDA is profit before interest, tax, depreciation, amortisation and selling, general and administrative costs.

4. Trading profit is before selling, general and administrative costs.