First Atlantic Capital Acquires a Majority Interest in Otis Spunkmeyer, a Leading U.S. Manufacturer of Frozen Cookie Dough and Muffins.

NEW YORK--(BUSINESS WIRE)--January 5, 1999--

Firm Plans to Grow Business Through Expanded Product Lines,

Distribution Synergies and Add-On Acquisitions

First Atlantic Capital, Ltd., a private investment firm specializing in acquiring and growing mid-size companies, today announced that it has acquired a majority interest in Otis Spunkmeyer, Inc., a leading U.S. manufacturer and distributor of frozen cookie dough, muffins and other specialty baked goods to foodservice and retail channels.

First Atlantic acquired its interest in Otis Spunkmeyer through one of its private equity funds, Atlantic Equity Partners International II, L.P. The Fund acquired majority ownership of the Company through a recapitalization, with management and existing shareholders retaining a significant stake.

With a customer base of more than 100,000 accounts, Otis Spunkmeyer expects to generate 1998 revenues in excess of $200 million. The Company's domestic operations include three manufacturing facilities, 58 sales centers and over 450 direct store delivery routes. The Company also has a U.K. subsidiary responsible for European sales.

"We are delighted to be making a controlling investment in a company with a leading brand name, excellent products and an experienced management team," said Roberto Buaron, First Atlantic's Chairman and Chief Executive Officer. "First Atlantic takes an active role in growing its portfolio companies in partnership with management through strategic add-on acquisitions, improvements in operating performance and appropriate changes in business strategy. Otis Spunkmeyer fits perfectly with our approach, and we intend to capitalize on the Company's many assets as we expand the business both domestically and internationally."

Joseph Haviv, a Managing Director of First Atlantic Capital, has been named Chairman of Otis Spunkmeyer. The Company's founder, Chairman and Chief Executive Officer, Kenneth B. Rawlings, has been named Vice Chairman, and John S. Schiavo, previously President and Chief Operating Officer, has been appointed Chief Executive Officer.

"We see tremendous growth potential for Otis Spunkmeyer through expanding its product lines, leveraging its distribution capabilities, and making strategic add-on acquisitions that further enhance the scope and market presence of the Company," said Mr. Haviv.

"First Atlantic has a strong history of growing its portfolio companies and adding significant value to a company's operations," said Mr. Rawlings. "We are excited to have them as a partner, and are confident they can provide the operating experience and capital necessary for Otis to achieve its expansion goals in the coming years."

Mr. Buaron added, "Management's shared ownership in the Company is a principal aspect of First Atlantic's investment philosophy. This approach directly aligns management interests with those of the Company's shareholders, and rewards management for the creation of equity value."

With a strong reputation for freshness and quality, Otis Spunkmeyer currently holds leading market positions in the foodservice frozen cookie dough, retail frozen cookie dough and retail branded muffins segments. These leading market positions, coupled with its nationwide distribution capability, have enabled the Company to achieve economies in purchasing, production and distribution, and have fueled annual sales growth in excess of 10% since 1992. These assets also provide a solid platform for introducing new products into the marketplace.

Founded in 1989, First Atlantic Capital, Ltd. now has $140 million under management, and its portfolio companies exceed $975 million in annual sales and $1.3 billion in combined enterprise value. Major current investments include: Berry Plastics, one of the largest and fastest-growing rigid plastic packaging manufacturers in the U.S., for which First Atlantic has completed nine add-on acquisitions, a recapitalization and two high-yield offerings in the past six years; CFP Group, a leading value-added meat and poultry processor which First Atlantic originally created through the merger of two complementary meat businesses, and has since completed a recapitalization and add-on acquisition in 1997; and Country Pure Foods, a leading institutional and private label fruit beverage manufacturer created through the merger of two regional fruit juice companies, which has completed three add-on acquisitions since 1997.