General Mills Agrees to Purchase Small Planet Foods, a Leading Producer Of Branded Organic Foods

MINNEAPOLIS, Dec. 15 /PRNewswire/ -- General Mills (NYSE: GIS - news) today announced it has signed an agreement in principle to purchase Small Planet Foods, a leading producer of organic food products. Small Planet's Cascadian Farm brand holds the number one or two share position in the markets for organic frozen fruits, vegetables, juices and entrees. The company's Muir Glen line is the leading brand of organic canned tomatoes, pasta sauces, salsa and condiments. Combined annual sales for these organic brands total approximately $60 million. Consummation of the transaction is subject to regulatory review. (Photo: http://www.newscom.com/cgi-bin/prnh/19991215/MNW001 )

General Mills Chairman and Chief Executive Officer Steve Sanger said the acquisition represents a strategic growth opportunity for the company. ``Sales of organic and natural foods have been growing by more than 20 percent a year over the last five years, and this strong market growth is expected to continue,'' he said. ``Small Planet is a highly respected company in the organic industry. They offer great-tasting products and have well-developed sales and distribution relationships with natural and organic food retailers. We're very excited about the opportunities we see for expanding Small Planet's existing product lines and developing new organic foods.''

Small Planet Foods Chief Executive Officer Gene Kahn, who joins General Mills as a vice president and will continue to lead the business, said, ``This opportunity to join one of America's most admired food companies is truly a dream come true. Our vision over the past 28 years, since Cascadian Farm was founded, has been to build a significant food enterprise using the sustainable principles of organic agriculture. Looking at our new partnership with General Mills, I see the resources of this great company as an opportunity to significantly accelerate the growth of organic agriculture and the development of organic food offerings for consumers.''

Small Planet Foods is based in Sedro-Woolley, Wash., and employs approximately 90 people in its Cascadian Farm and Muir Glen businesses. The Company is being sold by Trefoil Capital Investors II, LLP, an investment partnership owned by Shamrock Holdings, Inc., the investment company of the Roy E. Disney family, and GE Investments, an investment vehicle of the General Electric Pension Trust. A third business line, Fantastic Foods, is not included in this transaction and will continue operations under Trefoil and Shamrock.

The acquisition is expected to be modestly dilutive to General Mills' earnings (approximately 1 to 2 cents per share) in the current fiscal year, which ends in May 2000. Terms of the purchase were not disclosed.

This press release contains forward-looking statements based on management's current views and assumptions. Actual events may differ. Please refer to the cautionary statements related to forward-looking information contained in our 1999 Form 10-K and Form 10Q reports for further discussion of these matters.

SOURCE: General Mills