Hibernia Foods plc Acquires Sara Lee UK Bakery Business.

Business Editors

DUBLIN, Ireland--(BUSINESS WIRE)--June 4, 2001

-- Acquisition to deliver significant incremental Annual Revenues of
approximately Stg(pound)50 million (US$75 million)

-- Annualised Revenues of the enlarged Group approaching Stg(pound)150 million
(US$225 million)

-- Exclusive licence rights to the "Sara Lee" brand name for the UK and Ireland

Hibernia Foods plc {NASDAQ: HIBNY} ("Hibernia") today announced that it has completed its fifth and largest UK acquisition with the acquisition of Sara Lee Corporation's {NYSE: SLE} UK bakery business.

As part of this transaction Hibernia has become the exclusive UK and Irish licensee of the "Sara Lee" brand for sweet frozen baked goods and, in addition, has acquired brand names which are well recognised in the food service market such as "Kaysens", "Finnegans Famous Cakes" and "Death by Chocolate". Hibernia has also acquired approximately Stg(pound)20 million (US$30 million) in net assets of the UK bakery business, including its 310,000 square foot bakery production facility.

The Sara Lee UK Bakery business has annual revenues of approximately Stg(pound)50 million (US$75 million) of which circa 65% relate to retail sales to the major UK supermarkets, 27% relate to sales into the UK food-service market and the balance principally relates to export sales. The majority of the retail sales are made under the "Sara Lee" brand name, which is the brand leader in the frozen desserts category in the UK, with 97% prompted public awareness.

Based in Bridlington, Yorkshire, the Sara Lee UK Bakery business operates from a well-invested, highly automated, freehold production facility with a total floor area in excess of 310,000 square feet. The business also has commercial offices in York City and has approximately 460 employees.

Financial terms of the transaction were not disclosed, however, the business has been acquired for cash and on a debt free basis.

As a result of this acquisition and the recently completed La Boheme acquisition announced on May 15th 2001, Hibernia's annualised revenues will be approaching approximately Stg(pound)150 million (US$ 225 million), which marks the achievement of the Company's stated objective in 1999 of achieving annualised revenues of Stg(pound)150 million within two years.

Commenting on the acquisition, Hibernia Chairman and Chief Executive Officer Oliver Murphy, stated: "We are delighted to have completed this major acquisition. The Sara Lee UK bakery business will position us as the largest supplier of branded and private label frozen desserts in the UK, and provides us with an ideal balance between branded and private label revenues within this sector. Furthermore I see tremendous opportunities in relation to the foodservice aspect of the Sara Lee business, which is an area we have targeted as a significant growth opportunity ".

"I anticipate that there will be significant positive economies of scale and other synergies arising from this acquisition and our focus having completed the acquisition will be to implement a structured plan to realise those synergies commencing in the current fiscal year. Our goal is to replicate with the "Sara Lee" brand the tremendous growth we have achieved with the "Entenmann's" brand since we acquired that business in the Fall of 1998. We will operate the Sara Lee UK bakery business and our private label desserts business as separate businesses with separate management teams, as the nature of a branded business is fundamentally different from a private label business. However we would expect that a focused branded strategy will benefit the category as a whole and thus contribute towards the continued development of our private label frozen desserts business also."

"Our respective frozen desserts' businesses have both been restructured recently and accordingly the fixed overhead base which we both previously had has been reduced considerably. This re-alignment of our cost base should also contribute towards our objective going forward as consolidator of the sector, with the added benefit of having sufficient collective production capacity to meet our targeted growth plans without significant capital expenditure".

"As a result of this acquisition, the enlarged Hibernia Group's revenues will be split approximately 50:50 between branded revenues and private label revenues which, in my view, represents the optimal weighting going forward. Our strategy is to invest in our brands which in turn will impact positively on our private label business, thereby enhancing shareholder value ".

Hibernia Foods plc is a leading manufacturer of branded cakes and branded ready-meals, private-label and branded frozen and chilled desserts, frozen ready-meals and savory products, headquartered in Dublin, Ireland, with significant manufacturing facilities throughout England. It is the exclusive European license holder for Entenmann's branded sweet-baked cakes throughout all of geographical Europe, representing 52 countries and a population of over 700 million people and also the exclusive licensee for Sara Lee branded frozen desserts in the UK and Ireland.

This report contains forward-looking statements based upon certain assumptions by management, some of which may not materialize, and unanticipated events may occur which could effect the business of Hibernia and the markets for its products. Forward-looking statements contained herein involve a number of risk and uncertainties including, but not limited to, economic, competitive, governmental and technological factors.