Specialty Foods Group Announces Proposed Reorganization

OWENSBORO, KY, Dec. 23, 2016 /CNW/ - SFG Parent, Inc. ("SFG Parent") today announced a proposed reorganization (the "Reorganization") to streamline and simplify its capital structure and that of certain related companies. The Reorganization will facilitate the distribution of cash to the ultimate stakeholders of SFG Parent, being the Specialty Foods Group Income Fund (the "Fund"), the minority investors with holdings in Specialty Foods Group U.S. Holdings, Inc., Specialty Foods Group LLC and Specialty Foods Holdings, Inc. and the holders of 51.01% of the shares of SFG Parent.

The Reorganization will be carried out in part by way of a court approved plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement") and will require the approval of the Ontario Superior Court of Justice (Commercial List) as well as holders ("Unitholders") of at least 66⅔% of the units of the Fund represented in person or by proxy at a Unitholder meeting to be called to consider the Arrangement (the "Meeting"). The Meeting is expected to be held on February 17, 2017. 

Full details of the Arrangement and other aspects of the Reorganization will be included in an information circular (the "Circular") to be mailed to Unitholders in accordance with applicable securities laws and filed under the Fund's profile at www.sedar.com.  Included in the Circular is a Fairness Opinion rendered by PricewaterhouseCoopers LLP ("PwC") on December 19, 2016 that, as of such date, based upon and subject to the various considerations set forth in the Fairness Opinion, including the scope of review, limitations and assumptions, the Plan of Arrangement is fair, from a financial point of view, to the Unitholders.  The Fairness Opinion will be appended to the Circular and should be read in its entirety.

SFG Parent approved the Reorganization at a meeting of its board of directors on December 22, 2016.  In relation to such approval, the board reviewed and considered the following factors, among others: (i) SFG Parent has substantial funds that are surplus to its needs; (ii) the Reorganization provides for certain agreed economic entitlements among the ultimate stakeholders of SFG Parent; (iii) members of the three major groups of SFG Parent have indicated their support for the Reorganization; (iv) the Reorganization will substantially streamline and simplify the capital structure of the SFG entities to facilitate cash distributions; (v) PwC has delivered the Fairness Opinion; and (vi) the Reorganization requires approval by the Unitholders and the Ontario Superior Court of Justice (Commercial List).

ABOUT SFG PARENT AND SPECIALTY FOODS GROUP, INC.

SFG Parent holds an interest in Specialty Foods Group, Inc. ("SFG"). SFG is an independent producer and marketer of premium branded and private-label processed meat products in the United States. Through its subsidiaries, SFG sells a wide variety of products such as franks, hams, bacon, luncheon meats and delicatessen meats. These products are sold to a diverse customer base in the retail (e.g., supermarkets) and foodservice (e.g., restaurants) sectors. SFG sells products under a number of leading national and regional brands, such as Field, Kentucky Legend, Kentucky Gold, Fischer's, Mickelberry's and Scott Pete, as well as on a private-label basis.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information within the meaning of applicable securities laws that reflects the current expectations of management of SFG Parent regarding the Arrangement and its consummation, including whether conditions to the consummation of the Arrangement will be satisfied, and the timing for completing the Arrangement. The words "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "project", "continue", "predict", "potential", or the negative of these terms or other similar expressions have been used to identify these forward-looking statements.

Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond management's control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The following factors could cause actual results to differ materially from those discussed in the forward looking information: failure to satisfy the conditions to completion of the Arrangement, including approval by Unitholders and court approval. Additional risks and uncertainties regarding SFG Parent and the Arrangement will be described in the Circular.

This forward-looking information represents management's views as of the date of this press release. While subsequent events and developments may cause such views to change, SFG Parent does not intend to update this forward-looking information, except as required by applicable securities laws.

SOURCE Specialty Foods Group Inc.

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