A.L. Van Houtte Floats $46 Million Share Issue.

MONTREAL--(BUSINESS WIRE)--Nov. 11, 1997--(ME:VH.) A.L. VAN HOUTTE LTEE announces that it has just entered into a bought deal agreement with a syndicate of underwriters headed by CIBC Wood Gundy Securities Inc., who have decided to purchase and sell to the public 2,000,000 subordinate voting shares at a price of $ 23.00 per share, for a total consideration of $46,000,000. In addition, the Company has granted the underwriters an option to acquire up to 200,000 additional subordinate voting shares at the price of the offering. This option is valid until the closing date of the issue, which should take place around November 28, 1997. A.L. Van Houtte will soon file a simplified preliminary prospectus in Canada. The Company confirms that the subordinate voting shares issued as part of this placement qualify for inclusion in the Quebec Stock Savings Plan and will entitle holders to a deduction equal to 100 percent of their acquisition cost.

The proceeds from the offering will be used primarily to consolidate A.L. Van Houtte's financial structure to accelerate its expansion across North America. A large proportion will be used to repay the debt contracted for the purchase, effective September 15, 1997, of the 49 percent interest held by minority shareholders in VKI TECHNOLOGIES INC. and FILTERFRESH CORPORATION, as well as to finance the acquisition of the Filterfresh franchise in Cambridge (Boston) in respect of which an agreement in principle was signed last week. The balance will be allocated to the Company's working capital.

After the closing of the issue, A.L. Van Houtte will be essentially debt-free and have a shareholders' equity of $152 million. The Company will therefore be on solid ground to pursue its expansion, especially since it recently concluded an agreement with its major lenders raising its credit facilities from $50 million to $65 million, unsecured and without any principal repayment clauses.

With its financial health and flexibility, A.L. Van Houtte intends to reinforce its leadership in the high value-added single-cup segment, while intensifying its penetration of the Canadian market and breakthrough in the U.S. in the marketing of gourmet coffees. Among other things, the Company plans to further invest in the installation of new single-cup units in its Canadian and American coffee service networks as well as in state-of-the-art roasting technologies. It also plans to continue acquiring coffee service operators in Canada and Filterfresh franchised outlets in the United States. It should be noted in this regard that since the beginning of the current fiscal year, the Filterfresh subsidiary has purchased two of the largest franchises in its network, one in Chicago and the other in Boston.

Profile

A.L. Van Houtte ranks among the largest and best-integrated North American companies dedicated to the development, production and marketing of gourmet coffees. Established across Canada and in 27 American states, the Company develops, roasts and packages a wide range of coffee products, which it sells to consumers through all the major distribution channels, including coffee services in the workplace and institutional settings, grocery stores and restaurants. Through its Canadian subsidiaries Caf' Selena Inc. and Red Carpet Food Systems Ltd., along with its U.S. subsidiary Filterfresh Corporation, A.L. Van Houtte is the leading single-cup coffee service specialist in North America. These networks have a total of more than 19,200 units in 55 corporate outlets.

Its subsidiary VKI Technologies Inc. is the No. 1 designer, manufacturer and distributor of this line of sophisticated coffee- makers that brew coffee one cup at a time.

Its Coffee Group is the largest gourmet coffee roasting organization in Canada.

Finally, the Company operates the most extensive network of caf'- bistros in Quebec, with a total of 108 franchised and corporate outlets.

CONTACT: A.L. Van Houtte Ltd.

Paul-Andre Guillotte, 514/593-7711

Gerard Geoffrion, 514/593-7711