Premium Brands Inc. (Toronto: FFF) announced yesterday that it has entered into an agreement with Saskatchewan Wheat Pool (“SWP”) to acquire 3,381,182 shares in the Corporation, representing the 41% control block of Premium Brands owned by SWP, for a total purchase price of $46.3 million. Pursuant to the transaction, the majority of SWP’s shares in Premium Brands will be repurchased by Premium Brands. In addition, Raymond James Ltd., a full service investment dealer and financial advisor to Premium Brands, will purchase 292,099 of the SWP shares in Premium Brands for $4 million. The remaining shares of Premium Brands held by SWP are to be sold to the public pursuant to a secondary offering in conjunction with a treasury offering by the Corporation.

The Corporation also announced that its 51% (34% on a fully diluted basis) owned subsidiary, Goodlife Brands Inc., will amalgamate with certain of its subsidiaries. Under the terms of the amalgamation, Premium Brands will issue 1 share for each 5 shares in Goodlife Brands, resulting in the issuance of approximately 2 million shares, and the acquisition of the minority interest in Goodlife Brands.

The transactions are subject to certain conditions, including regulatory and shareholder approvals and debt and equity financing.

After giving effect to the SWP share repurchase, a treasury issue by Premium Brands, and acquisition of the remaining interest of Goodlife, the number of Premium Brands shares outstanding will increase from 8.2 million to approximately 8.9 million, and its public float will increase from approximately 4.8 million shares to approximately 8.9 million shares. After giving effect to the transactions, no one shareholder will own over 10% of the issued and outstanding shares of the Corporation.

Through its McSweeney’s and Goodlife Foods divisions, Goodlife Brands is Canada’s leading distributor of branded perishable food products to convenience stores, and Western Canada’s leading distributor of frozen meal solutions directly to consumers homes. Since 1997, sales in its McSweeney’s Division have grown from $4.1 million to $33.1 million last year, while McSweeney’s earnings before interest, taxes, depreciation and amortization have grown from $0.2 million to $1.8 million during this same period.

The Goodlife Foods Division began operations in May 2000 after the acquisition of the home delivery assets of Schwan’s Canada Ltd., which included 283 trucks, 24 depots, an ice cream plant and a listing of over 400,000 customers. In its first eight months of operation (period ending December 30, 2000) this Division achieved sales of $13.3 million, and is currently generating sales of $600,000 per week.

“Today’s announcement is a continuation of the process we initiated last year, namely to identify strategic alternatives to maximize shareholder value. These transactions, combined with the sale of our Fresh Pork Division, resolve three key issues that were identified as a result of that process,” said Fred Knoedler, President and CEO. “By diversifying our shareholder base, acquiring 100% of a high growth affiliated company, and focusing our company on consumer food products, we substantially simplify our operating and capital structures and position Premium Brands to benefit from a strategic transaction,” added Mr. Knoedler.

“The sale by Premium Brands of its Fresh Pork Division positions it as a true consumer food products company. Its manufacturing expertise, specialty products and brands, combined with our unique proprietary distribution initiatives and brands, will create a business model that not only has significant growth potential but will be unique to North America,” said George Paleologou, CEO of Goodlife Brands Inc. “Together, our two companies will be positioned to lead several segments of the specialty food and distribution industries,” added Mr. Paleologou.

“The combination of our direct to store distribution network with the McSweeney’s direct to store distribution network will create the largest network of its kind in Canada,” stated Mr. Knoedler. “Furthermore, by combining these networks we expect to generate significant synergies,” added Mr. Knoedler.

Premium Brands has been engaged in the food processing business since 1917 and has manufacturing facilities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Washington and Oregon.

CONTACT: Will Kalutycz, CFO of Premium Brands Inc., 604-656-3100; or George Paleologou, CEO of Goodlife Brands Inc., 604-656-3100