August 8/Paramus, N.J./Press Release -- Smart Balance Inc. announced it acquired 100% of the equity interest of Importations DE-RO-MA, which owns Glutino Food Group, for $66.3 million, from Claridge, a Montreal-based investment firm. Based in Laval, Quebec, Glutino is a manufacturer and marketer of premium-priced, gluten-free foods sold under the Glutino and Gluten Free Pantry brands. Glutino offers a wide range of shelf-stable and frozen gluten-free products, including snack foods, frozen baked goods, frozen entrees and baking mixes throughout North America and on its website www.glutenfree.com. Glutino had annual sales of $53.9 million during its fiscal year ended March 31, 2011.

The transaction was funded by Smart Balance's existing credit facility. As of the close of the acquisition, Smart Balance's long-term debt is estimated to be $115 million. The addition of Glutino to Smart Balance's portfolio of brands is expected to be accretive to earnings in the next 12 months.

Commenting on the announcement, chairman and chief executive officer Stephen Hughes stated, "We are truly excited about adding the Glutino Food Group to our portfolio of health and wellness brands. Glutino has increased its sales approximately 30% annually over the past three years, and we are confident about its growth prospects and contribution to Smart Balance. The demand for gluten-free products is significant, and is now a category of over $2 billion in retail sales. We are bullish on the continuation of the category's 10% compound annual growth rate due to increased awareness and diagnosis of gluten-induced ailments, including celiac disease, gluten intolerance and wheat allergies."

Furthermore, Hughes stated, "The gluten-free segment is complementary with our corporate vision of creating a health and wellness innovation platform that builds brands targeted at highly motivated consumer need states. Just as our Smart Balance®, Earth Balance® and Bestlife™ brands address the health and wellness needs of consumers, Glutino addresses a specific dietary need by eliminating gluten in foods that consumers have to avoid for health reasons. Dedication to providing high-quality and great tasting products has enabled the company to pioneer and shape the gluten-free category. This has created a strong consumer following and established Glutino as the preeminent gluten-free brand."

"We are very impressed with the Glutino management team, led by Terence Dalton, and believe the skill sets of both the Glutino and Smart Balance teams will contribute to improving the performance of both companies. Both companies have similar missions and values. Through this combination, we believe Smart Balance's core competencies in sales, marketing and product development will help Glutino realize its growth potential, ultimately creating long-term value for our shareholders, and exciting opportunities for our new and existing employees," concluded Mr. Hughes.

"I know I speak for the Glutino team when I say we are enthusiastic about joining the Smart Balance organization," stated Terence Dalton, general manager. "We are impressed with the company's leadership and vision and look forward to working together to grow its health and wellness platform. We are excited to be part of a strategically focused organization, committed to meeting consumer needs."

Citigroup Global Markets Inc. acted as exclusive financial advisor to Smart Balance in connection with the acquisition. Fried Frank Harris Shriver & Jacobson LLP and McCarthy McCarthy Tetrault LLP served as legal counsel to Smart Balance.

From the August 9, 2011,Prepared Foods' Daily News.