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To: Glenn Petersen who wrote (350)9/26/2006 1:11:55 PM
From: Glenn Petersen  Read Replies (1) of 2828
Boulder Specialty Brands, which raised $102 million when it completed its IPO on December 19, 2005, has announced that it has signed a definitive agreement to acquire the manufacturer of the Smart Balance and Earth Balance heart-healthy food products.

Boulder Specialty Brands, Inc. Announces Proposed Acquisition of GFA Brands, Inc., Marketer of Smart Balance(R) Heart-Healthy Food Products

Tuesday September 26, 8:29 am ET

LONGMONT, Colo.--(BUSINESS WIRE)--Boulder Specialty Brands, Inc. ("Boulder") (OTCBB:BDSBU - News; OTCBB:BDSB - News; OTCBB:BDSBW - News) today announced it has signed a definitive agreement to acquire GFA Brands, Inc., one of the fastest growing U.S. food companies and the maker of Smart Balance® and Earth Balance® heart-healthy food products as well as other established brands.

Stephen B. Hughes, Chairman and Chief Executive Officer of Boulder Specialty Brands, said, "The acquisition of GFA Brands represents a significant step in our strategy to be a leading marketer of healthy and organic brands targeting two of the most powerful trends in the global food and beverage market. GFA is the ideal platform for Boulder to leverage our management team's skills and expertise in the categories in which Smart Balance competes today as well as our brand building experience."

Hughes continued, "GFA Brands' CEO Bob Harris and his team have done a remarkable job. We look forward to continuing to expand Smart Balance and Earth Balance into a wide range of food and beverage categories."

GFA's product line includes margarine, popcorn, mayonnaise, peanut butter and cooking oils, as well as natural and organic foods under the Earth Balance® brand. In addition, GFA's brands include Smart Beat®, Nucoa, Fanning's, H-O and Spin Blend heart-healthy food products. Smart Balance® was launched in 1996. TSG Consumer Partners, a leading private equity firm focused on consumer products companies, acquired a stake in the company in 2004.

Boulder Specialty Brands also announced that it intends to change its name to Smart Balance, Inc. upon consummation of the transaction. Under the terms of the agreement, a wholly owned subsidiary of Boulder Specialty Brands will merge with and into GFA Holdings, Inc., the sole stockholder of GFA Brands, Inc., making GFA Holdings a wholly owned subsidiary of Boulder.

"Our team looks forward to joining with Boulder to continue to grow these terrific brands," said Bob Harris. "I have enjoyed working with TSG. They have been a strong resource for our company and management."

"We value our partnership with the Harris family," said Alexander S. Panos, a Managing Director of TSG. "Smart Balance has developed a loyal following among consumers and has strong growth potential."

GFA Holdings' shareholders, who include TSG Consumer Partners, will receive approximately $465 million in cash at closing, less amounts to be paid for certain commitments, estimated to be approximately $14 million, net of income tax benefit. As part of the transaction, Boulder will assume certain tax benefits with an estimated present value of approximately $15 million. To fund the transaction purchase price and related fees and expenses, and provide additional capital for growth and expansion, various institutional investors have agreed to purchase, in a private placement, $107.5 million of Boulder common stock at $7.46 per share, comprising 14,410,188 million shares of Boulder common stock. Institutional investors, including funds affiliated with Och-Ziff Capital Management Group, have also agreed to purchase for $138.5 million, 15,388,889 shares of Boulder Series A convertible preferred stock and warrants. The Series A preferred stock is convertible at $9.00 per share into Boulder common shares. The common stock was priced at a level equal to that of the shares' closing price on the date that the contingent financing was agreed upon. Bank of America, N.A. and Banc of America Securities LLC have agreed to provide debt financing of approximately $180.0 million, pursuant to a loan commitment letter. The equity and debt will be funded at the closing of the merger. Net proceeds after deducting placement fees and related expenses will be combined with up to $100 million of the cash currently available for acquisition investment that is currently held in trust by Boulder. The closing of the merger and the equity and debt financings are subject to stockholder approval, regulatory clearances and other customary closing conditions.

Boulder will file a Current Report on Form 8-K with the Securities and Exchange Commission, which more fully sets forth the merger transaction and related financings.

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