Piper Jaffray Consumer M&A Weekly

Piper Jaffray Consumer M&A Weekly August 23, 2004

Consumer Mergers & Acquisitions Murray Huneke- Managing Director, Group Head, 650-838-1388, [email protected] Scott LaRue - Managing Director, Head of Consumer M&A, 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 08/23/04 08/23/04 Una Mas Heritage Ventures NA NA NA NA Restaurant Heritage Ventures acquired regional Mexican food chain Una Mas 08/20/04 08/20/04 Deli Fresh Foods Sun Rayz Products NA NA NA NA Food & Beverage Sun Rayz Products has acquired sandwich and salad producer Deli Fresh 08/19/04 Pending Rochester Big & Tall Clothing Casual Male Retail Group $15.0 $20.0 NA NA Retail Casual Male Retail Group to acquire Rochester Big and Tall Clothing 08/18/04 Pending Fruit-Ices Corporation Wells Dairy NA NA NA NA Food & Beverage Wells Dairy to acquire FrozFruit & Chill Ice brands maker Fruit-Ices Corp. 08/18/04 Pending MBC Food Corp. Diamond Ranch Foods Ltd. NA NA NA NA Food & Beverage Diamond Ranch Foods to acquire meat processor MBC Food Corp. 08/17/04 08/17/04 "Savier" brand (Nike, Inc.) Gen-X Sports (The Forzani G NA NA NA NA Apparel Gen-X Sports has acquired the "Savier" skate shoe brand from Nike Inc. 08/12/04 Pending Bell Sports Corp. Fenway Partners (Riddell Spo NA $240.0 $30.0 8.0x Leisure & Entertainme Fenway Partners to acquire bike and ski helmet maker Bell Sports Corp. 08/12/04 Pending Winchell's Donut House Yum Yum Donuts NA NA NA NA Restaurant Yum Yum Donuts to acquire Winchell's Donut House chain 08/12/04 08/12/04 Concord Confections (Dubble BuTootsie Roll Industries $197.0 $217.0 NA NA Leisure & Entertainme Tootsie Roll to acquire Concord Confections, maker of Dubble Bubble 08/11/04 08/11/04 Official Starter & Official Starter Nike Inc NA $43.0 NA NA Leisure & Entertainme Nike acquired the parent company of the Starter athletic clothing brand 08/11/04 08/11/04 Sure Fit, Inc. D.E. Shaw & Co. NA NA NA NA Consumer Products D.E. Shaw & Co. acquired assets of bankrupt slipcover producer Sure Fit 08/10/04 Pending Port City Coffee Synesi, Inc. NA NA NA NA Food & Beverage Coffee holding company Synesi to acquire Port City Coffee Roasters 08/09/04 Pending Smith & Hawken The Scotts Co. $58.0 $72.0 NA NA Consumer Products Lawn and garden giant The Scotts Co. to acquire Smith & Hawken Note: Figures per public filings and press releases.

M&A Spotlight Transactions August 12, 2004 - Fenway to Acquire Bell Sports Corp., Combine Helmet Makers All M&A Transaction Multiples Fenway Partners Inc. said Thursday, August 12, it is buying bike and ski helmet maker Bell Sports Corp. for $240 million and will merge it into its existing (LTM Data as of 3/31/04) portfolio company Riddell Sports Group Inc.

15.0x Goldman, Sachs & Co. is providing Chicago-based Riddell with a $200 million debt facility that will help fund the acquisition and refinance Riddell's existing 13.2x 13.1x debt, a source with knowledge of the deal said. Irving, Texas.-based Bell is owned by Chartwell Investments Inc., GarMark Partners LP and Wachovia Capital 13.0x 12.4x Partners. 11.0x 9.5x 9.5x "We like building brands, and these are strong-branded companies with attractive growth opportunities," said Mark Genender, a managing director of Fenway 8.5x 9.3x Partners. "The combination of Bell and Riddell creates a pre-eminent head protection company." 9.0x 6.9x 6.7x 7.0x Riddell makes helmets, athletic apparel and equipment that are sold to high schools, colleges and National Football League teams. Bell caters more to 5.0x consumers, providing equipment for bicycling, motocross and street motorcycling, downhill skiing and snowboarding. Bell's helmets are sold under the Bell 5.0x and Giro brand names. Bell had revenue of about $210 million in the past 12 months, Genender said. He declined to disclose its Ebitda, but a source said Bell recorded about $30 million of cash flow in the same period. That makes the price about 8 times Ebitda. Combined, Bell and Riddell will produce more than 8 3.0x million helmets annually, and together they are projected to generate upwards of $300 million in revenue in 2004. < $25 $25 - $100 $100 - $250 $250 - $1,000 >$1,000 Transaction Size

Genender said the newly combined company will pursue acquisitions. Bill Fry, president and chief executive of Bell, will become head of the combined EBIT EBITDA company, whose name is still under consideration. Bill Sherman will remain president and CEO of Riddell.

Source: The Deal.com

Recent High Yield Debt and Convertible Securities Issued by Consumer Companies Moody's / Announced Issued Company Issue Description S&P Coupon Maturity Business Description 08/13/04 08/20/04 Blockbuster Inc. $300.0 mm HY notes (144a) B1 / B+ 9.00% 2012 Rental retailer of DVDs, videocassettes and video games 07/28/04 08/04/04 Smithfield Foods $400.0 mm HY notes (144a) Ba2 / BB 7.00% 2011 Pork processor and producer of hogs. Also produces and markets branded food products 07/23/04 07/30/04 Duane Reade $195.0 mm HY notes (144a) B3 / CCC+ 9.75% 2011 Operator of a drugstore chain in metropolitan New York 06/24/04 07/01/04 K2 Corporation $200.0 mm HY notes (144a) Ba3 / BB 7.38% 2014 Designer, manufacturer and marketer of sporting goods, recreational and industrial products 06/24/04 06/30/04 Pierre Foods Inc. $125.0 mm HY notes (144a) B3 / B- 9.88% 2012 Producer of food products for schools, foodservice, vending and convenience stores 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 Source: Bloomberg, Public Press Piper Jaffray Consumer M&A Weekly August 23, 2004

The Private Equity/ LBO Sponsor Corner

Date Target Financial Sponsor Summary of Transaction 08/23/04 Una Mas Heritage Ventures Silicon Valley-based Heritage Ventures has acquired Una Mas, a regional Mexican food chain with 21 restaurants 08/17/04 "Savier" brand (Nike, Inc.) Gen-X Sports (The Forzani Group) Gen-X Sports, a subsidiary of The Forzani Group, has acquired the North American rights to "Savier", an authentic skate shoe brand, from Nike 08/12/04 Bell Sports Corp. Fenway Partners (Riddell Sports) Fenway has agreed to acquire bike and ski helmet maker Bell Sports Corp and will merge it into its existing portfolio company Riddell Sports Group 08/11/04 Sure Fit, Inc. D.E. Shaw & Co. D.E. Shaw & Co. has acquired the assets of bankrupt Sure Fit, Inc., the leading North American producer of furniture slipcovers for home use 08/05/04 Evenflo Co. Harvest Partners Harvest Partners has acquired Evenflo Co., a maker of juvenile and baby products, from Kohlberg Kravis Roberts & Co. 08/04/04 Northern Cap & Glove Huron Capital Partners Huron Capital Partners has acquired hat, glove and scarf manufacturer Northern Cap & Glove 08/04/04 IHOP Franchisee Argonne Capital Group Argonne Capital Group has acquired the restaurant assets and development rights of IHOP’s largest individual franchisee, Joseph Katin Private Equity/LBO Analytics

Spread (LIBOR) for Leveraged Buyout Senior Bank Loans Buyout Funds Raised By Deal Size (2004 YTD as of 7/15/04)

450 $70 $63.3 $55.4 400 363 409 406 $60 350 344 357 $50 316 353 306 328 $34.5 $34.5 $36.9 300 334 $40 277 257 309 264 294 250 $30 $23.2 $24.0 251 242 238 $18.4 200 ($ in Billions) $20 $17.0 $11.7 $11.3 1996 1997 1998 1999 2000 2001 2002 2003 Q1 04 $5.3 $6.0 $10

Less than $100 Million $100 Million to $250 Million $0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 YTD

Source: Portfolio Management Data and Buyouts Newsletter. Market Overview Close as of Weekly YTD LTM Equity Capital Markets Activity: 8/20/2004 % Change (1) % Change % Change Last Week’s Activity NASDAQ 1,838 4.4 (8.2) 4.2 There were 14 transactions completed in the equity capital markets last week raising a combined $4.3 billion. Deal activity consisted of 2 DJIA 10,110 2.8 (3.6) 7.7 IPOs, 6 follow-ons, 1 GDR, and 5 convertibles. On average, IPOs traded up 9% on the first day and finished the week up 18% from offer S&P 500 1,098 3.1 (1.5) 10.3 price. Follow-on activity was comprised of 3 REIT, 1 energy, 1 industrial growth and 1 restaurant offering. On average, follow-on offerings Russell 2000 548 5.6 (2.4) 11.9 traded down 5% in registration, but finished the week up 3% in the aftermarket. S&P Food Index 230 1.9 6.0 18.3 S&P Retail Index 367 5.5 0.9 7.0 The Week Ahead S&P Apparel Index 222 6.5 6.6 26.4 There are 3 deals expected to price this week including 2 IPOs and 1 follow-on offering. Issuers look to raise a combined $430 million. S&P Rest. Index 243 4.3 5.0 20.5

Broader Market Activity 125 The major market indices were up for the week. The Dow Jones increased 285 pts, or 2.8%, and closed at 10,110. The Nasdaq rose 81 120 points, or 4.4%, and closed at 1,838. The S&P 500 gained 33 points, or 3.1%, and closed at 1,098. The Russell 2000 increased 31 points, or 115 5.6%, and closed at 548. 110

105

100

95 8/22/03 10/06/03 11/17/03 12/31/03 2/13/04 3/29/04 5/11/04 6/24/04 8/06/04 NASDAQ DJIA S&P 500

(1) Based on Friday closing prices. Piper Jaffray Consumer M&A Weekly August 23, 2004

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