Monterey Pasta Company (Nasdaq: PSTA) yesterday announced the purchase of the Nate’s polenta business from Elena’s Food Specialties, Inc., of South San Francisco, Calif. for a consideration of $450,000 in cash, plus inventory with a value of $13,000. Additionally, Elena’s shareholders could receive an earn-out based upon future sales above a predetermined level. The earn-out will be calculated during the first year of combined operations.
The purchase of the South San Francisco-based Nate’s polenta business added national distribution of approximately 700 retail outlets that includes a significant private-label business. The product will continue to be manufactured in Elena’s facility under a co-pack agreement.
“Adding the Nate’s polenta business represents another example of the Company’s key strategy of diversifying with gourmet refrigerated food products. Polenta is a very good fit with Monterey Pasta’s other products, which typically represent complementary dishes for Italian meal occasions. Also, for a business of its size, Nate’s has achieved strong penetration in some key retail accounts. Our objective will be to leverage these relationships while enhancing the retail perception of the diverse nature of Monterey Pasta’s product line,” said Lance Hewitt, Monterey Pasta’s president and CEO.
“This acquisition also represents another step in our continuing strategic effort to rebalance our distribution across retail chains and club operators nationwide, by adding profitable retail business,” continued Hewitt.
Founded as a regional brand, Monterey Pasta now has national distribution in over 5,800 retail and club stores in the United States and selected regions of Canada and the Caribbean. Monterey Pasta manufactures USDA inspected, healthy, gourmet refrigerated fresh pasta, sauces, soups, pizzas and calzones at an integrated 43,680 sq. foot corporate headquarters/manufacturing facility in Salinas, (Monterey County) Calif.
Founded in 1953, Elena’s Food Specialties, Inc. is a South San Francisco-based manufacturer of traditional Mexican foods. Elena’s Mexican food products are distributed regionally throughout the western and southern United States and are sold into food service and grocery retail accounts. The company also manufactures a line of health food products that include a variety of soy-based products. Elena’s natural foods products are sold nationwide to natural and general grocery accounts.
This press release contains forward-looking statements that involve a number of uncertainties and risks that could cause actual results to differ materially from those discussed in the forward-looking statements, including risks associated with the retention of key personnel, the risks inherent in food production, continuing to sell in existing retail and club stores and to continue adding new stores, and intense competition in the market in which the Company competes. For additional information regarding these and other risks, reference is made to the Company’s Annual Report on Form 10-K, for the year ended Dec. 26, 1999, the subsequent quarterly reports on Form 10-Q for the First, Second, and Third quarters of 2000 and the Company’s 2000 Proxy.