Indiana Packers Corporation has agreed to acquire Specialty Foods Group




Indiana Packers Corporation (“IPC”) has agreed to acquire Specialty Foods Group, LLC (“SFG”). The Fund has been advised that closing is subject to regulatory approval, approval of the equity holders of SFG, and other usual conditions and that the sale is expected to close in the third quarter of 2018.

The Fund understands that it is anticipated that the sale of SFG will give rise to net cash proceeds for the Fund on closing in the range of US$25 million to US$27 million subject to adjustment for cash, debt and other liabilities of SFG on the closing date.

News Release

Toronto, ON, August 23, 2018 – Specialty Foods Group Income Fund (the “Fund”) announced today that it has been advised by Specialty Foods Group, LLC (“SFG”) that SFG has entered into an agreement with an unrelated company, Indiana Packers Corporation (“IPC”), makers of INDIANA KITCHEN® premium pork products, pursuant to which IPC has agreed to acquire SFG. The Fund has been advised that closing is subject to regulatory approval, approval of the equity holders of SFG, and other usual conditions and that the sale is expected to close in the third quarter of 2018.

The Fund understands that it is anticipated that the sale of SFG will give rise to net cash proceeds for the Fund on closing in the range of US$25 million to US$27 million subject to adjustment for cash, debt and other liabilities of SFG on the closing date. After post-closing adjustments and reserves are dealt with, likely by the 2nd quarter of 2020, further cash proceeds may be received by the Fund, estimated to be up to approximately US$2 million.

Cash proceeds will be distributed to the Fund’s unitholders in accordance with the SFG Plan of Arrangement approved by the Ontario Superior Court of Justice on February 22, 2017. Amounts to be received by individual unitholders and the timing of such receipt will depend upon, among other things and where applicable, income taxes, professional fees, other expenses and the timing of receipt of tax clearance certificates.

As a result of the anticipated sale of SFG and in order to focus on the timely closing of the sale of SFG, SFG has advised the Fund that it has determined, effective immediately, to cease filing quarterly and annual financial statements as well as management discussion and analysis on the Fund’s SEDAR profile. However, the Fund will provide reasonably detailed updates when appropriate regarding the status of the sales transaction. After closing, details will also be provided from time to time as to the cash received by the Fund in respect of the sale, closing adjustments, reserves and amounts available for distribution to Fund unitholders as well as the anticipated timing of such distributions.

The Fund is also providing an update today in respect of the amount held back from the distribution to unitholders of the Fund following the reorganization of SFG (the “Reorganization”) which was previously announced by SFG on March 1, 2017. The Reorganization streamlined and simplified SFG’s capital structure and that of certain related
companies and facilitated the distribution by the Fund of more than US$13 million to its unitholders. That distribution by the Fund was subject to a holdback of Cdn.$750,000 (the “Holdback”) to cover anticipated Fund expenses and liabilities. As at June 30, 2018, Cdn.$468,373.80 of the Holdback continued to be held in trust to cover anticipated Fund expenses and liabilities.

Securities regulators in British Columbia, Alberta, Manitoba, Ontario and Quebec issued cease trade orders with respect to the trust units of the Fund in 2009 and 2010. Nothing described herein will change the status of the trust units or those cease trade orders. The trust units will continue to be subject to such cease trade orders before and after giving effect to the SFG sale. However, immediately prior to the closing of the SFG sale, the trustee of the Fund, 959832 Ontario Inc., will become a direct wholly-owned subsidiary of Specialty Foods Group Canada Holdings, Inc.

ABOUT SPECIALTY FOODS GROUP INCOME FUND
The Fund is an open-ended limited purpose trust established under the laws of the Province of Ontario, which, until completion of the sale of SFG, indirectly holds an interest in SFG. SFG is an independent U.S. producer and marketer of premium branded and private-label processed meat products. 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, Kentuckian Gold, Fischer’s, Mickelberry’s and Scott Pete, as well as on a private-label basis.

FORWARD-LOOKING INFORMATION
This press release contains forward-looking information within the meaning of applicable securities laws that reflects the current expectations of the trustee of the Fund regarding the sale of SFG based on information received from management of SFG. 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 such forward-looking information.

Forward-looking information is based upon a number of assumptions and is subject to a number of known and unknown risks and uncertainties, many of which are beyond the Fund’s or SFG’s control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. 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. Certain factor(s) could cause actual results to differ materially from those discussed in the forward looking information.

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

FURTHER INFORMATION
For further information: Email: information@specialtyfoodsgroup.com.