CHAMP Private Equity

12/04/06 CHAMP completes capitalisation of new company

MANASSEN FOODS AUSTRALIA SHAREHOLDERS AND CHAMP PRIVATE EQUITY JOIN FORCES TO CREATE LEADING BRANDED FOOD SUPPLIER
Media Release

CHAMP Private Equity, acting on behalf of the CHAMP II funds (“CHAMP”), together with existing Manassen Foods Australia shareholders, today announced that they have completed capitalising a new company, Food Holdings Pty Ltd, trading as Manassen Foods, which will own:

Manassen Foods Australia Pty Ltd (MFA)
together with the assets of
The Great Southern Foods group
King Oscar and
Hutchinsons (NZ) Pty Ltd (Hutchinsons)

The combined entity will be Australasia’s Leading Specialty Branded Food Supplier. Group total revenue will be in excess of A$250 million per annum with over 350 employees. The price of the acquisitions is confidential.

The businesses to be acquired comprise:

MFA is a privately owned importer, distributor and brand owner of some of Australia’s finest international and local brand names servicing the FMCG grocery trade. The company is the largest of its kind in Australia. MFA boasts a healthy split of business between its exclusive branded agency business and its company owned brands with approximately 50% of the revenue base being derived from the latter. MFA supplies leading brands such as Trident, Castello Cheeses, Walkers Shortbread, The Laughing Cow & Mini Babybel Cheeses, Tilda Rice, Mrs Fields Cookies, McVities Biscuits, Bahlsen Biscuits, S&W Mayonnaise, Jelly Belly Jelly Beans, The Margaret River Dairy Company, Carr’s Water Crackers and Findus Frozen Foods.
Great Southern Foods is a privately owned food company with established brands in the fresh and ambient noodle categories. It also has a strong presence in pro-biotics with a branded offer and heavy involvement in private label pro-biotic drinks. Great Southern Foods’ brands include Wokka Noodles, Bamboo Pot and The Food Song.
King Oscar is an icon brand in the canned fish category – Sardines. It commenced selling in Australia in 1913 and is a market leader worldwide. King Oscar is positioned at the premium end of the category in both price and quality with national distribution across all major retail customers.
Hutchinsons is one of New Zealand’s largest food importers and distributors of leading international food brands. All of its representation is conducted on an exclusive basis. Hutchinsons’ brands include Sharwoods Indian Cuisine, Port Salut Cheese, Jermi Speciality Cheeses, Lurpak Butter and Abba Seafoods. In addition to these brand names, Hutchinsons boast many of the same Manassen agency lines sold and marketed in New Zealand.

MFA Chairman, Mr. Roy Manassen, said, “Our aim at Manassen Foods is to double revenue within three years to A$500 million. Using the original MFA business as a base, we will work with CHAMP to establish a major diverse food company, supplying leading brands, growing organically, and pursuing expansion through acquisition of further complementary businesses.”

The key wholesale grocery segments in which Manassen Foods presently competes is worth around A$ 5 billion, growing at an average rate of 5.5%.

“We at Manassen are in the brand building business and our new company will pursue this approach with vigour. We will continue to seek out new product development opportunities for our company owned brands and be at the forefront of innovation. We will also remain focused on developing our local and international brand portfolios and strive to ensure that Australia and New Zealand are “first to market” with new and exciting food trends. We will also seek to develop in the food service channels”

CHAMP will own approximately 51% of Manassen Foods and Mr. Manassen will be the next single largest shareholder. Mr. Phillip Jones from MFA will continue as an Executive Director and retain significant equity. The existing MFA management team will continue running the expanded enterprise.

Manassen Foods has appointed Mr. Michael Bracka as CEO to commence in early June. Mr Bracka has 18 years FMCG experience, having previously held positions as managing director Kelloggs Australia as well as various other senior executive roles in the FMCG industry with Cussons and Benckiser.

CHAMP Director, Mr. Cameron Buchanan, said, “We are fortunate that we already have the right people in place to run the operations so for customers and suppliers it will be business as usual. The difference is the company now has an even stronger balance sheet and we intend to use that strength to aggressively seek bolt –on acquisitions which offer synergies to the Group.”

“For over 50 years MFA has built an outstanding reputation as a food supplier and brand builder of the highest quality,” Mr. Buchanan said.

“The acquisitions announced today set the platform for future growth,” Mr. Buchanan said. “Several possible add–on acquisitions have already been identified and negotiations are progressing” he said.

“We consider that in three years when we have achieved our objective in doubling the business, Manassen Foods will be a most attractive prospect for an IPO,” Mr. Buchanan said.

Funds managed by CHAMP Private Equity provided the majority of the equity for the transaction in partnership with the existing MFA shareholders and members of the senior management team.

CHAMP was advised by Baker and McKenzie and PwC.

For further information please contact:

CHAMP Private Equity
Mr. Cameron Buchanan, Director
Ph: 02 8248 8842
cbuchanan@champequity.com.au

Manassen
Mr. Phillip Jones, Director
Ph: 03 9763 3053
pjones@manassen.com.au