Earthgrains' European Dough Operations Acquires Chevalier Servant of France.

ST. LOUIS--(BUSINESS WIRE)--Aug. 3, 1998--

New Operations Bolster Pan-European Strategy in France, Spain, U.K., Benelux, Germany and Switzerland

The Earthgrains Company, which owns French-based refrigerated-dough producer Europate, S.A.S., announced today it has acquired the assets of Societe De Concept en Produits Agro-Alimentaires, S.A., which owns French refrigerated- and frozen-dough producer Chevalier Servant, S.A.

Europate and Chevalier Servant will be operated as divisions of Earthgrains' new French-based holding company, EuroDough, S.A.R.L., which will compete across Europe with canned-, rolled- and frozen-dough products. The acquisition adds frozen- and rolled-dough capacity and improves Earthgrains' capability and flexibility to serve retailers, contract customers and consumers in Europe.

"We are excited about adding the high-quality and efficient Chevalier Servant operations into our European business," said William H. Opdyke, president of Earthgrains Refrigerated Dough Products. "We will gain rolled-dough market share in France, the largest dough market in Europe. We are also in excellent position to execute our Pan-European strategy. Our well-rounded dough operations will allow us to compete in the appropriate category across the varied European market - whether it be rolled, canned or frozen dough marketed via EuroDough brands, store brands or contract arrangement."

Terms of the all-cash acquisition will not be publicly disclosed. The agreement will be accretive to earnings immediately.

Chevalier Servant, which produces store-brand dough products, had sales last fiscal year of 86.3 million French Francs (about $14.5 million based on current foreign exchange rates). Chevalier Servant has two rolled-dough plants, in Valence, south of Lyon, and in Vittel, southeast of Nancy, and also has a frozen-dough plant under construction in Vittel.

With the acquisition, Earthgrains will operate four dough plants in Europe. Europate, which makes rolled dough and is the only producer of canned dough in Europe, operates one plant, in Lievin, France. Europate's canned- and rolled-dough products are sold throughout Europe, primarily through contract-packing arrangements with major international food companies. In France, Europate also sells rolled and canned dough under its CroustiPate and HappyRoll brands.

Earthgrains also announced the appointment of Richard W. "Rick" Witherspoon as president and director general of EuroDough and chief executive officer of Europate. The management of Chevalier Servant will remain in place and former owner Gerard Schlienger will serve in a consulting capacity.

"Rick Witherspoon brings the expertise and background needed to drive expansion of EuroDough and drive exceptional customer service," Opdyke said. "Rick will spearhead our customer-partnering initiatives to become the preferred supplier of dough across Europe."

Witherspoon, 55, who previously served as Earthgrains Refrigerated Dough Products executive vice president for business development, has more than 25 years' experience in packaged-food manufacturing, sales and marketing. Witherspoon, who has served on the Earthgrains Policy Committee, also has expertise in strategic planning and general business management and has been active in industry trade groups, including the ECR Joint Industry Executive Committee, Private Label Manufacturers Association and Food Marketing Institute, all in the United States.

"EuroDough is positioned to take advantage of growth opportunities throughout Europe, and Chevalier Servant will play a significant part in our ability to serve customers and satisfy consumers," Witherspoon said. "Through our Pan-European strategy, we want to broaden our scope and leverage our capabilities, including branded sales, store-brand manufacturing and contract packing."

In France, the acquisition will increase market share for EuroDough. "Our penetration of supermarket accounts is increasing," Witherspoon said. "With our commitment to operational excellence, customer service will continue to drive business."

EuroDough also has growth initiatives under way in Spain, the United Kingdom, Belgium, the Netherlands, Luxembourg, Germany, Switzerland and elsewhere in Europe. "We are meeting with retailers and discussing development of store-brand products," Witherspoon said.

About Earthgrains

Earthgrains, which had sales of $1.7 billion in fiscal 1998, operates fresh-bakery and refrigerated-dough businesses in the United States and Europe.

Earthgrains is one of the largest producers of fresh packaged bread and baked goods and the only manufacturer of store-brand canned refrigerated dough products in the United States. Earthgrains has 44 U.S. bakeries and two refrigerated-dough plants. Major brands include Colonial, Rainbo, IronKids, Earth Grains, Heiner's, Grant's Farm, San Luis Sourdough, Sunbeam (licensed), Kern's, Smith's, Coopers Mill, Waldensian Heritage, Break Cake and Merico.

Internationally, the company operates 11 production facilities in Europe, marketing bakery products in Spain and Portugal under the Bimbo and Silueta brands and marketing refrigerated dough products under the CroustiPate and HappyRoll brands in France and via customer brands throughout Western Europe.

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