Immediate
Daniel J. Sescleifer
314/877-7113
RALCORP HOLDINGS, INC. PLANS TO ACQUIRE
THE RED WING COMPANY, INC.
ST. LOUIS, MO, JUNE 16, 2000 Ralcorp Holdings, Inc. announced today that it
signed a definitive agreement to purchase The Red Wing Company, Inc., a leading
producer of private label shelf-stable type products with sales of $348 million
and EBITDA of approximately $21 million for the fiscal year ended April 29,
2000. The combination of Red Wing and Ralcorp's Martin Gillet shelf-stable
business (acquired in March of 1999) should generate sales of approximately $410
million in the shelf-stable, wet fill store brand segment.
The transaction is expected to close by the end of July, subject to customary
conditions including the Hart-Scott-Rodino waiting period. Ralcorp will finance
the acquisition, valued at $135 million, with borrowings under a separate $200
million financing arrangement. Ralcorp expects the acquisition will be slightly
dilutive to earnings in the near term and is expected to be accretive in twelve
to eighteen months.
Red Wing's ultimate parent company is Tomkins PLC which is divesting Red Wing in
order to focus on its core engineering and industrial activities.
The Company stated that "We are thrilled to be adding Red Wing to our growing
store brand company. This acquisition will solidify our position in the
shelf-stable, wet fill food category and should boost overall sales to
approximately $1.1 billion. Red Wing has successfully developed a business
focused on store brands and has secured opportunistic copacking business in
several key areas."
Red Wing manufactures 9,000 SKU's and employs approximately 1,060 full and
part-time employees. Red Wing's wide array of product categories include
syrups, peanut butter, preserves and jellies, tomato based sauces, spoonable
spreads, pourable dressings, BBQ sauces, specialty sauces and honey. Red Wing
also owns the "Major Peters" and "Jero" Bloody Mary and other cocktail mix
businesses.
The Company further stated that "This transaction continues Ralcorp's strategy
of building the preeminent store brand company through acquisitions and internal
growth." Soon after Ralcorp completed the sale of its ski resorts and branded
cereal business in 1997, it began acquiring companies focused on store brand
foods. The purchase of Red Wing will be the Company's tenth acquisition in three
and a half years. With the acquisition of Red Wing, Ralcorp will further
diversify its store brand business base and will have critical mass in four
business unit platforms: ready-to-eat cereals, cookies and crackers, snack
nuts, and shelf-stable wet fill products.
Currently, Ralcorp produces a variety of store brand foods that are sold under
the individual labels of various grocery, mass merchandise and drug store
retailers. Ralcorp's diversified product mix includes ready-to-eat and hot
cereals, crackers and cookies, snack nuts, mayonnaise, shelf-stable dressings,
and chocolate candy. In addition, Ralcorp holds a 21.9 percent interest in Vail
Resorts, Inc. (ticker: MTN), the premier mountain resort operator in North
America.
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NOTE: Information in this press release that includes information other than
historical data contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. Any such forward-looking statements
are made based on information currently known and are subject to various risk
and uncertainties and are therefore qualified by the Company's cautionary
statements contained in its filings with the Securities and Exchange Commission.
