Piper Jaffray Consumer M&A Weekly

Piper Jaffray Consumer M&A Weekly June 14, 2004

Consumer Mergers & Acquisitions David Jacquin - Managing Director, Group Head, 415-277-1505, [email protected] Scott LaRue - Managing Director, 650-838-1407, [email protected] Tom Halverson - Principal, 612-303-6371, [email protected] John Twichell - Vice President 415-277-1533, [email protected] John Barrymore - Vice President, 415-277-1501, [email protected] Robert Arnold - Associate, 415-277-1548, [email protected]

Selected Consumer M&A Transactions (Approximate valuations, $ in millions) Date Equity Enterprise LTM EV / LTM Announced Effective Target Acquiror Value Value EBITDA EBITDA Universe Comments 06/10/04 Pending Unzipped Apparel (Candie's) TKO Apparel NA NA NA NA Apparel TKO Apparel to acquire Candie's jeans wear subsidiary, Unzipped Apparel 06/09/04 Pending Marshall Field's (1) May Department Stores Co. NA $3,240.0 $225.0 14.4x Retail May Department Stores to acquire Marshall Field's from Target Corp. 06/08/04 Pending Ames True Temper Inc Castle Harlan Inc NA $380.0 NA NA Consumer Products Castle Harlan to acquire garden-equipment maker Ames True Temper 06/08/04 Pending DeBas Chocolate House of Brussels Chocolates NA NA NA NA Food & Beverage House of Brussels to acquire chocolate producer DeBas Chocolate 06/08/04 06/08/04 Como Sport Windsong Allegiance Group NA NA NA NA Apparel Windsong Allegiance has acquired sportswear manufacturer Como Sport 06/08/04 06/08/04 Game for Golf LiquidGolf Holding Corp. NA NA NA NA Apparel LiquidGolf Holding Corp. to acquire Game for Golf Inc. 06/08/04 06/08/04 Montana Naturals Nutraceutical International C NA $0.6 NA NA Food & Beverage Nutraceutical Intl has acquired selected assets of Montana Naturals 06/07/04 Pending First Years (2) RC2 Corp. $165.7 $140.0 $18.1 7.7x Leisure & Entertainme RC2 Corp. to acquire First Years, a marketer infant & toddler products 06/07/04 Pending GBI Marketing Yankee Candle Company NA NA NA NA Consumer Products Yankee Candle Company to acquire gift products distributor GBI Marketing 06/07/04 Pending Playing Mantis RC2 Corp. NA $19.5 NA NA Leisure & Entertainme RC2 Corp. to acquire Playing Mantis, maker of toys and collectibles 06/02/04 Pending Home Products International (3) Management Buyout $11.8 $129.0 $18.6 6.9x Consumer Products Chairman/CEO James Tennant to take Home Products Intl private Note: Figures per public filings and press releases. (1) Financials per most recent SEC filings (Target Corp.'s 10-K for period ending 1/31/04 and 10-Q for period ending 5/1/04). (2) Financials per most recent SEC filings (10-K for period ending 12/31/03 and 10-Q for period ending 3/1/04). Based on fully diluted share count of 8.9 million shares and cash of $25.7 million. (3) Financials per most recent SEC filings (10-K for period ending 12/27/03 and 10-Q for period ending 3/27/04). Based on fully diluted share count of 7.9 million shares and net debt of $117.2 million.

M&A Spotlight Transactions June 9, 2004 - The May Department Stores Company to Acquire Marshall Field's All M&A Transaction Multiples The May Department Stores Company [NYSE: MAY] announced Wednesday that it has entered into a definitive agreement to acquire the Marshall Field's (LTM Data as of 12/31/03) department store group and nine Mervyn's store locations in the Twin Cities area from Target Corporation [NYSE: TGT] for a total consideration of $3.240 billion in cash, subject to adjustments. The transaction is expected to be completed in May's fiscal 2004 second or third quarter.

Marshall Field's, which reported revenues of $2.58 billion and generated $107 million in segment earnings in fiscal 2003, has 62 stores primarily in the Chicago, 15.0x 13.5x 13.2x Minneapolis and Detroit metropolitan areas. Locations include its world-famous flagship store on State Street in the Chicago Loop and important flagship 12.4x 13.0x 10.7x stores in Detroit, Minneapolis, and suburban Chicago. With the addition of Marshall Field's, May will operate 500 department stores in 39 states. 10.7x 11.0x 9.7x 8.6x Under the terms of the agreement, May will acquire all the assets that comprise Marshall Field's, including stores, inventory, customer receivables,and 9.0x 6.9x distribution centers in Chicago, Detroit and Minneapolis. May is also acquiring the real estate associated with the nine Mervyn's stores. 7.0x 6.0x 5.1x 5.0x Gene Kahn, May's chairman and chief executive officer, said, "We are delighted to welcome this venerable and nationally recognized, premier department store company as a division of May and to welcome the Marshall Field's associates to our company. This unique opportunity to add to our department store portfolio 3.0x < $25 $25 - $100 $100 - $250 $250 - $1,000 >$1,000 will provide a great value to our shareowners. It will allow us to combine the best of Marshall Field's and May to further expand and enhance the products and services we can provide to our customers. Among the benefits we see is that this combination will produce excellent economies of scale, improved buying Transaction Size power, and an expanded distribution network." EBIT EBITDA

After completion of the acquisition and its integration into May, the company expects to realize pre-tax synergies of $85 million in fiscal year 2005, $140 million in fiscal year 2006, and $180 million per year thereafter. The acquisition is expected to be accretive to earnings per share in fiscal year 2005 and beyond.

May will retain the Marshall Field's nameplate and operate it as one of the stand-alone department store divisions under the May umbrella. May also intends to maintain the product exclusives – such as Frango mints – that are long-standing traditions at Marshall Field's. Linda L. Ahlers will remain as president of Marshall Field's, and headquarters for the division will remain in Minneapolis. May will offer employment to all Marshall Field's associates.

The acquisition is subject to customary closing conditions, including Hart-Scott-Rodino approval under the United States antitrust laws. The transaction does not require shareowner approvals for either May or Target.

The May Department Stores Company currently operates 438 department stores under the names of Lord & Taylor, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, L.S. Ayres, Meier & Frank, Robinsons-May, Strawbridge's, and The Jones Store, as well as 217 David's Bridal stores, 456 After Hours Formalwear stores, and 10 Priscilla of Boston stores in its Bridal Group. May operates in 46 states, the District of Columbia, and Puerto Rico.

Source: Company Press Releases.

Recent High Yield Debt and Convertible Securities Issued by Consumer Companies Moody's / Announced Issued Company Issue Description S&P Coupon Maturity Business Description 05/24/04 05/27/04 Leiner Health Products $150.0 mm HY notes (144a) B3 / CCC+ 11.00% 2012 Manufacturer, marketer and distributor of vitamins, minerals and nutritional products 04/06/04 04/14/04 Vicorp Restaurants $136.5 mm HY notes (144a) B3 / B 10.50% 2011 Operator & franchisor of mid-scale family restaurants, under Bakers Square and Village Inn names 03/30/04 04/06/04 Prestige Brands Inc $210.0 mm HY notes (144a) Caa1 / CCC+ 9.25% 2012 Marketer of consumer product brands Prell®, Chloraseptic®, Clear eyes®, Murine® & Comet® 03/30/04 04/06/04 Sealy Mattress $390.0 mm HY notes (144a) Caa1 / B- 8.25% 2014 Manufacturer of a diversified line of mattress and foundation products under the Sealy name 03/24/04 03/25/04 Real Mex Restaurants $105.0 mm HY notes (144a) B2 / B- 10.00% 2010 Operator of El Torito, Acapulco, and other casual dining Mexican restaurant concepts 03/17/04 03/25/04 American Achievement $150.0 mm HY notes (144a) B3 / B- 8.25% 2012 Manufacturer of class rings, yearbooks, graduation products and achievement publications 03/09/04 03/16/04 Mrs. Fields $115.0 mm HY notes (144a) B3 / CCC+ 11.50% 2011 Snack-food retailer selling brownies, cookies, pretzels, and other baked goods 03/05/04 03/10/04 Gold Kist Inc $200.0 mm HY notes (144a) B2 / B- 10.25% 2014 Marketer of farm commodities in processed and unprocessed forms Source: Bloomberg, Public Press Piper Jaffray Consumer M&A Weekly June 14, 2004

Date Target Financial Sponsor Summary of Transaction 06/08/04 Ames True Temper Inc Castle Harlan Inc Castle Harlan has agreed to acquire garden-equipment maker Ames True Temper Inc. from Wind Point Partners for $380 million 06/08/04 Como Sport Windsong Allegiance Group Windsong Allegiance Group, a stable of apparel brands, including Joe Boxer and Pivot Rules, has acquired sportswear manufacturer Como Sport 06/02/04 Home Products International (3) Management Buyout A management buyout group led by current Chairman and CEO James R. Tennant has agreed to acquire housewares company Home Products Intl 06/03/04 Jillian's (9 restaurants) Gemini Investors Inc. Jillian's to sell most of its remaining assets including 19 upscale restaurants and "billiard-type" urban clubs to Gemini Investors and CEO Dan Smith 05/29/04 Grohe Holding GmbH Texas Pacific Group & CSFB Texas Pacific Group and Credit Suisse First Boston have agreed to buy German plumbing fixture company Grohe Holding GmbH 05/27/04 Boot Town Inc. LKCM Capital Partners LKCM Capital Partners has been selected as the winning bidder for all 16 stores of the Texas-based western apparel retailer Boot Town 05/27/04 Chef Solutions Questor Partners Deutsche Lufthansa is selling Chef Solutions, a U.S. maker of ready meals this is part of its catering business, to Questor Partners 05/20/04 American Pacific Enterprises Genstar Capital Genstar Capital has acquired American Pacific, a designer and marketer of specialty bedding products, bath accessories and window coverings Private Equity/LBO Analytics SPREAD (LIBOR) FOR LEVERAGED BUYOUTS SENIOR BANK BUYOUT FUNDS RAISED LOANS $ in Billions By Deal Size $70 $63.3 $55.4 Basis Points $60 450 400 363 409 406 $50 $36.9 350 344 357 $34.5 $34.5 306 316 353 328 $40 334 300 277 257 264 294 309 $30 $24.0 250 $23.2 251 $18.4 242 238 $17.0 200 $20 $11.7 1996 1997 1998 1999 2000 2001 2002 2003 Q1 04 $5.3 $6.0 $10 $5.8 Less than $100 Million $100 Million to $250 Million $0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Q1 2004

Market Overview Equity Capital Markets Activity: Close as of Weekly YTD LTM 6/11/2004 % Change (1) % Change % Change Last Week’s Activity NASDAQ 2,000 1.1 (0.2) 22.9 There were 18 transactions completed in the equity capital markets last week raising a combined $3.3 billion. Deal activity consisted of 3 DJIA 10,410 1.6 (0.4) 15.0 IPOs, 14 follow-ons and 1 convertible. On average, IPOs traded flat on the first day, and finished the week flat from offer price. Follow-on S&P 500 1,136 1.2 2.2 15.4 activity consisted of 8 shelf takedowns and 6 conventional marketed transactions. On average, follow-on offerings traded down 4% in Russell 2000 569 0.2 2.2 26.2 registration and priced down 2% from the last trade, but finished the week up 2% in the aftermarket. S&P Food Index 236 0.2 9.1 18.6 S&P Retail Index 389 1.4 7.5 26.2 The Week Ahead S&P Apparel Index 223 2.6 8.1 31.0 There are 16 deals expected to price this week including 11 IPOs and 5 follow-on offerings. Issuers look to raise a combined $2.4 billion. S&P Rest. Index 244 1.2 6.4 25.2

Broader Market Activity 160 The major market indices were up for the week. The Dow Jones increased 167 pts, or 1.6%, and closed at 10,410. The Nasdaq increased 21 150 points, or 1.1%, and closed at 2,000. The S&P 500 rose 13 points, or 1.2%, and closed at 1,136. The Russell 2000 increased 1 point, or 0.2%, 140 and closed at 569. 130 120 110 100 90 80 6/13/03 7/28/03 9/09/03 10/21/03 12/03/03 1/16/04 3/02/04 4/14/04 5/26/04 NASDAQ DJIA S&P 500

(1) Based on Friday closing prices. Piper Jaffray Consumer M&A Weekly June 14, 2004

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