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Kraft Foods Sells Farley and Sathers Confections to FS Acquisition

NORTHFIELD, Ill. - Kraft Foods and FS Acquisition Corp., a subsidiary of Catterton Partners, announced today an agreement for FS Acquisition to acquire the U.S.-based Farley and Sathers confectionery businesses from Kraft. Revenues for 2001 are expected to be about $220 million. The transaction is expected to be completed by the end of January 2002, and terms of the agreement were not disclosed.

"We are delighted to find two brands with quality reputations that meet our criteria for a focused sales and marketing effort," commented FS Acquisition's Chairman Keith Lively. "We plan to immediately channel our energies to more fully realize the market potential of these valuable brands."

"We are selling the Farley's and Sathers brands because they are not a strategic fit with the rest of our portfolio," said Betsy D. Holden, Co-CEO, Kraft Foods, and President and CEO, Kraft Foods North America. "However, these brands should be well-positioned for future growth with FS."

The Farley business manufactures and sells a wide variety of candy under the Farley's brand as well as private label, sold primarily to the food, drug and mass merchandiser retail outlets. The Sathers business markets rebagged candies and snacks under the Sathers brand names sold in the convenience store channel, with products made by a variety of manufacturers, including Farley. The Farley's and Sathers brands are sold through Kraft's direct sales organization and brokers. Kraft will continue to provide sales, logistics and other support services as needed for up to six months or more after the sale.

The sale includes the trademarks, Sathers distribution and six facilities - three Farley plants in New Orleans, LA; Oklahoma City, OK; and Des Plaines, IL; and three Sathers locations in Round Lake, MN; Pittston, PA; and the Cummings Road, Chattanooga, TN, plant. The businesses have approximately 1,100 employees.
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