Vestar Capital and Goldner Hawn Complete $800 Million Transaction to Take Michael Foods Private; Deal Includes $200 Million of High-Yield Debt

Apr 10, 2001, 01:00 ET from Michael Foods, Inc.

    MINNEAPOLIS, April 10 /PRNewswire/ --
     Michael Foods, Inc. (Nasdaq:   MIKL) today announced the completion of a
 transaction by which the Company becomes privately-held, controlled by the
 present management group, led by the Company's Chairman, President and Chief
 Executive Officer Gregg A. Ostrander, affiliates of the Michael family, and
 affiliates of Vestar Capital Partners (Vestar Capital) and Goldner Hawn
 Johnson & Morrison (GHJ&M).  The merger agreement, announced on December 21,
 2000, provided for the acquisition of the Company for $30.10 per share in
 cash.  With debt assumed at closing and stock option consideration, the total
 value of the transaction is approximately $800 million.
     The transaction was financed in part by a successful $200 million
 high-yield debt issue underwritten by Banc of America Securities and Bear,
 Stearns & Co., Inc.  The balance of the debt financing took the form of bank
 loans, also underwritten by Banc of America and Bear, Stearns.  Vestar Capital
 and GHJ&M provided approximately $175 million of the $225 million equity
 contribution, with the Michael family and the management group contributing
 the balance.
     Mr. Ostrander commented, "We are pleased to have successfully completed
 this transaction and look forward to executing our plans for growth and
 developing all of our businesses as a private company.  We believe this
 transaction will bring important opportunities to our employees, partners, and
 customers.  We are also excited to have the continued involvement of the
 Michael family and the support of our new partners at Vestar Capital and
 Goldner Hawn Johnson & Morrison."
     James P. Kelley, a managing director of Vestar Capital, commented,
 "Michael Foods is a great franchise with exciting opportunities in each of its
 businesses.  I think the strength of the company and the quality of management
 were evidenced by our ability to achieve such a successful high-yield debt
 financing in a generally difficult market.  The company's prospects are
 further enhanced by management's new role as substantial owners."
     The Company's shareholders should anticipate receiving a letter of
 transmittal from the paying agent, Wells Fargo Shareowner Services, shortly.
 The letter will describe the process for exchanging share certificates for the
 merger consideration.
     Michael Foods, Inc., based in Minneapolis, is the world's largest producer
 of value-added egg products, which are sold through foodservice, industrial
 and retail distribution channels.  The Company is also a leading supplier of
 processed dairy products, including aseptic creamers and soft serve ice cream
 mix, as well as high quality refrigerated potato products distributed at
 retail under the Simply Potatoes(R) and Diner's Choice(R) brand names.  During
 the most recent year, Michael Foods generated approximately $1.1 billion in
 net sales.
     Vestar Capital Partners is a leading investment firm specializing in
 management buyouts, recapitalizations and growth capital investments.  Vestar
 invests, as partners with management teams, in high quality, middle market
 companies.  Since the firm's founding in 1988, Vestar has completed over
 thirty investments in companies with a total value exceeding $11 billion.
 This transaction is Vestar's fifth successful going private transaction during
 the last two years.  Vestar currently manages committed equity capital of
 approximately $4 billion and has offices in New York, Denver, Paris and Milan.
     Goldner Hawn Johnson & Morrison is a private equity investment firm based
 in Minneapolis.  The firm was founded in 1989 and has successfully completed
 more than 20 investments through four funds, with a total transaction value in
 excess of $1 billion.
 
 

SOURCE Michael Foods, Inc.
    MINNEAPOLIS, April 10 /PRNewswire/ --
     Michael Foods, Inc. (Nasdaq:   MIKL) today announced the completion of a
 transaction by which the Company becomes privately-held, controlled by the
 present management group, led by the Company's Chairman, President and Chief
 Executive Officer Gregg A. Ostrander, affiliates of the Michael family, and
 affiliates of Vestar Capital Partners (Vestar Capital) and Goldner Hawn
 Johnson & Morrison (GHJ&M).  The merger agreement, announced on December 21,
 2000, provided for the acquisition of the Company for $30.10 per share in
 cash.  With debt assumed at closing and stock option consideration, the total
 value of the transaction is approximately $800 million.
     The transaction was financed in part by a successful $200 million
 high-yield debt issue underwritten by Banc of America Securities and Bear,
 Stearns & Co., Inc.  The balance of the debt financing took the form of bank
 loans, also underwritten by Banc of America and Bear, Stearns.  Vestar Capital
 and GHJ&M provided approximately $175 million of the $225 million equity
 contribution, with the Michael family and the management group contributing
 the balance.
     Mr. Ostrander commented, "We are pleased to have successfully completed
 this transaction and look forward to executing our plans for growth and
 developing all of our businesses as a private company.  We believe this
 transaction will bring important opportunities to our employees, partners, and
 customers.  We are also excited to have the continued involvement of the
 Michael family and the support of our new partners at Vestar Capital and
 Goldner Hawn Johnson & Morrison."
     James P. Kelley, a managing director of Vestar Capital, commented,
 "Michael Foods is a great franchise with exciting opportunities in each of its
 businesses.  I think the strength of the company and the quality of management
 were evidenced by our ability to achieve such a successful high-yield debt
 financing in a generally difficult market.  The company's prospects are
 further enhanced by management's new role as substantial owners."
     The Company's shareholders should anticipate receiving a letter of
 transmittal from the paying agent, Wells Fargo Shareowner Services, shortly.
 The letter will describe the process for exchanging share certificates for the
 merger consideration.
     Michael Foods, Inc., based in Minneapolis, is the world's largest producer
 of value-added egg products, which are sold through foodservice, industrial
 and retail distribution channels.  The Company is also a leading supplier of
 processed dairy products, including aseptic creamers and soft serve ice cream
 mix, as well as high quality refrigerated potato products distributed at
 retail under the Simply Potatoes(R) and Diner's Choice(R) brand names.  During
 the most recent year, Michael Foods generated approximately $1.1 billion in
 net sales.
     Vestar Capital Partners is a leading investment firm specializing in
 management buyouts, recapitalizations and growth capital investments.  Vestar
 invests, as partners with management teams, in high quality, middle market
 companies.  Since the firm's founding in 1988, Vestar has completed over
 thirty investments in companies with a total value exceeding $11 billion.
 This transaction is Vestar's fifth successful going private transaction during
 the last two years.  Vestar currently manages committed equity capital of
 approximately $4 billion and has offices in New York, Denver, Paris and Milan.
     Goldner Hawn Johnson & Morrison is a private equity investment firm based
 in Minneapolis.  The firm was founded in 1989 and has successfully completed
 more than 20 investments through four funds, with a total transaction value in
 excess of $1 billion.
 
 SOURCE  Michael Foods, Inc.

RELATED LINKS

http://www.michaelfoods.com