Treehouse Foods to acquire operating business of E.D. Smith Income Fund



    WINONA, ON, June 25 /CNW/ - E.D. Smith Income Fund (TSX: JAM.UN) (the
"Fund") today announced that it has entered into a definitive agreement with
TreeHouse Foods, Inc. (NYSE:   THS)("TreeHouse") pursuant to which TreeHouse
will acquire substantially all of the assets of the Fund, consisting of all of
the outstanding shares of E.D. Smith & Sons, Limited, all of the outstanding
shares of E.D. Smith & Sons GP Ltd., certain indebtedness of E.D. Smith & Sons
Limited and all of the LP units of E.D. Smith & Sons LP. Under the agreement,
TreeHouse will acquire the assets of the Fund for approximately
CDN$217 million, plus the assumption of existing debt and transaction costs.
It is anticipated that the cash purchase price will allow cash to be received
by unitholders of E.D. Smith Income Fund of up to CDN$9.15 per unit subject to
a holdback of CDN$0.60 per unit to cover certain contingencies associated with
a potential tax liability, expenses and wind up costs. These contingencies may
reduce the amount that is ultimately received by unitholders.
    The transaction, which is subject to approval by the Fund's unitholders
by two-thirds of the votes cast at a special meeting, regulatory approval and
other customary closing conditions, is expected to close near the end of the
third quarter of 2007. The Fund will set a record date for a special meeting
of unitholders to approve the terms of the transaction and the wind up of the
Fund which is expected to be held by the end of August, 2007.
    The Fund is subject to a "no-shop" restriction on its ability to solicit
third party proposals, provide information and engage in discussions with
third parties. The no-shop provision is subject to a "fiduciary out" provision
that allows the Fund to provide information and participate in discussions
with respect to any acquisition proposal and which the Board of Trustees has
determined in good faith constitutes or is reasonably likely to result in a
Superior Proposal.
    The Fund may terminate the Agreement under certain circumstances,
including if the Board of Trustees determines in good faith it has received a
Superior Proposal. If the Fund terminates the Agreement to accept a Superior
Proposal it must pay a termination fee of CDN$8,000,000 to TreeHouse.
TreeHouse will have the right to match any Acquisition Proposal that the Board
of Trustees has determined is a Superior Proposal.
    The sale of the Fund's assets is the outcome of a previously announced
strategic review process by the Board. E.D. Smith Income Fund's financial
advisor, Genuity Capital Markets, has provided an opinion to the Board of
Trustees of the Fund that the consideration payable under the transaction is
fair from a financial point of view to unitholders. The Fund's Board of
Trustees has unanimously determined that the Agreement and the proposed
transaction are fair to and in the best interests of the Fund's unitholders.
Accordingly, the Board has unanimously recommended that the unitholders vote
in favour of the special resolution to approve the proposed sale and the
winding-up of the Fund.
    "We have conducted an extensive review of the strategic alternatives
available to the E.D. Smith Income Fund and believe this deal provides our
unitholders with an attractive price for the business and a material premium
to the recent trading levels of the units," said Jack Scott, Chairman of the
E.D. Smith Income Fund.
    "We are excited about partnering with TreeHouse as our combined resources
will allow E.D. Smith to execute its strategic plan and grow the E.D. Smith
business," commented Martin Thrasher, Interim President and Chief Executive
Officer of E.D. Smith.
    The all cash transaction will be financed through borrowings under
TreeHouse's existing $500 million credit facility. "E.D. Smith is a great
company and we are excited about the category and geographic opportunities it
brings to TreeHouse," said Sam K. Reed, Chairman and CEO of TreeHouse Foods,
Inc. "In Canada, it is the leading private label manufacturer in nine key dry
grocery categories with outstanding relationships with key retailers that will
open up opportunities for our U.S. based business. In the U.S., it is the
leading producer of private label salad dressings which will be a great
compliment to our portfolio and is in a growth category aligned with healthy
eating. Further, our U.S. food service business will open up an exciting new
distribution channel for E.D. Smith's product portfolio."
    E.D. Smith operates production facilities in Winona, Ontario, Seaforth,
Ontario, Cambridge, Ontario and North East, Pennsylvania, and employs
approximately 800 people. E.D. Smith's headquarters will remain in Winona,
Ontario.
    JP Morgan and TD Securities are acting as financial advisors to TreeHouse
in connection with the transaction. Genuity Capital Markets is advising E.D.
Smith Income Fund on the transaction.
    The Fund also announced that the arbitrator appointed to resolve a
disagreement over the amount of the final purchase price owing in connection
with the 2006 purchase of Seaforth Creamery Inc. has made his final
determination. As a consequence the Fund is liable to make an additional
payment in respect of the unpaid portion of the purchase price in the amount
of approximately CDN$8,036,000 plus accrued interest from April 10, 2007. The
Fund had previously reserved CDN$3,164,000 in respect of this additional
liability in its financial statements. Payment of CDN$4,670,000 of the awarded
amount will be made from a CDN$20 million letter of credit previously arranged
by the Fund for the specific purpose of making the final installment payment
for the acquisition. The remaining balance of the payment of CDN$3,366,000
plus accrued interest will be made from the Fund's operating credit facility.

    About E.D. Smith Income Fund

    E.D. Smith Income Fund is an unincorporated, open-ended trust that owns
E.D. Smith & Sons, Limited (the "Company") and its subsidiaries. Founded in
1882 and headquartered in Winona, Ontario, E.D. Smith is a leading
manufacturer of a diverse portfolio of high quality branded and private label
food products. The Company markets and distributes its products to the food
retail and foodservice markets in Canada and the U.S. The Company's products
range from fruit-based products, which include jams (including jellies,
marmalades and spreads) pie fillings, and ketchup, to sauces, which include
pasta sauces, salsa, barbeque sauces specialty sauces and syrups, to pourable
and spoonable salad dressings and marinades.

    About TreeHouse Foods

    TreeHouse is a food manufacturer servicing primarily the retail grocery
and foodservice channels. Its products include pickles and related products;
non-dairy powdered coffee creamer; private label soup and infant feeding
products, salsa, Mexican sauces and other food products including aseptic
sauces, refrigerated salad dressings, and liquid non-dairy creamer. TreeHouse
believes it is the largest manufacturer of pickles and non-dairy powdered
creamer in the United States based on sales volume.

    Forward Looking Statements

    This press release contains "forward-looking statements." Forward-looking
statements include all statements that do not relate solely to historical or
current facts, and can generally be identified by the use of words such as
"may," "should," "could," "expect," "seek to," "anticipates," "plans,"
"believes," "estimates," "intends," "predicts," "projects," "potential" or
"continue" or the negative of such terms and other comparable terminology.
These statements are only predictions. The outcome of the events described in
these forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause the company or its industry's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance
or achievement expressed or implied by these forward-looking statements. The
Fund's annual information form dated March 27, 2007 discusses some of the
factors that could contribute to these differences. You are cautioned not to
unduly rely on such forward-looking statements, which speak only as of the
date made, when evaluating the information presented in this presentation. The
Fund expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein, to
reflect any change in its expectations with regard thereto, or any other
change in events, conditions or circumstances on which any statement is based.

    %SEDAR: 00022102E




For further information:

For further information: Bruce Smith, Executive Vice President & CFO,
E.D. Smith Income Fund, Tel: (905) 643-1211 ext. 5220, bsmith@edsmith.com;
Trevor Heisler, Investor Relations, The Equicom Group Inc., Tel: (416)
815-0700 ext. 270, theisler@equicomgroup.com

Organization Profile

E.D. SMITH INCOME FUND

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