Utrecht, December 23, 2009
The Executive Board of Royal Wessanen nv (“Wessanen”) announces that it has
reached agreement with Kehe Food Distributors, Inc. (“Kehe”) on the sale and
purchase of Tree of Life, Inc. and all but one of its subsidiaries (“Tree of
Life”) for a cash consideration of USD 190 million (EUR 133 million) on a cash
and debt free basis and subject to certain adjustments on closing. Panos Brands
LLC has been excluded from the sale.
The net proceeds of the sale will be used to reduce Wessanen’s debt and
strengthen its balance sheet to support growth of its European businesses. The
transaction is expected to close in the first quarter of 2010.
The management of Tree of Life is expected to stay. In view of this, Richard
Lane, President and CEO of Tree of Life, has stepped down as Executive Board
member of Wessanen, effective immediately.
Frans Koffrie, Wessanen CEO, commented: “For Wessanen this is a major step in
its strategic transition to a group focused on European organic and specialty
food markets. Earlier this year we announced reviews to exit our North American
branded and distribution businesses. With the earlier divestment of Liberty
Richter and now Tree of Life, good progress has been made toward this strategic
focus. In combination with a strengthened balance sheet, we are well-positioned
to benefit in full from the ample opportunities of the European organic and
specialty food markets.
We are pleased to have found a good home for Tree of Life and its employees,
whom I would like to thank for their efforts and commitment over the years. On
behalf of the Executive Board, I thank Richard for the invaluable experience he
brought to our North-American operations and for his successful leadership of
Tree of Life, and I wish him every success in the future.”
The transaction price of USD 190 million is subject to a normal working capital
adjustment and potential downward adjustment depending on Tree of Life’s
operating performance prior to closing. The performance related floor in the
transaction price is USD 171 million. On the basis of the agreed pricing and
costs associated with the transaction, Wessanen anticipates recognizing a book
loss of approximately EUR 50 million after tax in the fourth quarter of 2009,
excluding a net cumulative exchange loss deferred in equity.
Completion of the transaction is subject to approval by Wessanen’s
shareholders, receipt of regulatory approvals, receipt of financing and other
customary conditions. Kehe has secured commitments from banks and other
financial institutions enabling Kehe to complete the transaction unless a
significant deterioration in operating performance were to occur. If Kehe does
not obtain final approval from its lenders financing the transaction, in most
circumstances a break fee of USD 5 million is payable to Wessanen. If approval
for the transaction is not obtained from Wessanen’s shareholders, a break fee
of USD 2 million would be payable to Kehe.
Wessanen will convene an Extraordinary General Meeting of Shareholders on
Wednesday 13 January 2010 to obtain the required shareholders’ approval, by
public notice on its website and in advertisements in national papers.
Royal Wessanen nv
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