Acquisition

Cranswick PLC 17 December 2004 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN 17 December 2004 Part I CRANSWICK plc PROPOSED ACQUISITION OF PERKINS CHILLED FOODS Acquisition highlights • Acquisition of Brookfield Foods and Studleigh-Royd, trading as Perkins Chilled Foods, from Perkins Foods Group for a cash consideration of £80.6 million • Perkins Chilled Foods is one of the UK's leading providers of cooked meats and poultry to the UK food retail and food service sectors • Excellent strategic fit, providing Cranswick with increased critical mass, particularly in the growing UK cooked meats sector • Acquisition to be financed from new bank facilities • Acquisition is expected to enhance the Company's earnings per share before goodwill amortisation for the year ending 31 March 2006(1) • Acquisition is conditional upon the approval of Shareholders, to be sought at an Extraordinary General Meeting to be held on or around 6 January 2005 • Cranswick continues to trade in line with the Board's expectations Cash Placing highlights • Cash placing of 2,050,000 new Ordinary Shares at a price of 457 pence per new Ordinary Share to raise approximately £9.4 million • Placing Shares to rank pari passu with existing Ordinary Shares, save for the entitlement to Cranswick's interim dividend of 4.7 pence per Ordinary Share Commenting on the transaction, Martin Davey, Executive Chairman, said: 'Perkins Chilled Foods is a business which we have long admired. We are delighted to announce the Acquisition today and look forward to working with their management team to generate further value for Cranswick's shareholders.' This summary should be read in conjunction with the full text of the attached announcement. (1) This statement should not be interpreted to mean that the Company's future earnings per share following the Acquisition will necessarily be greater than or equal to the Company's historical earnings per share. Part II PROPOSED ACQUISITION OF PERKINS CHILLED FOODS Introduction Cranswick announces that it has conditionally agreed to acquire the entire issued share capital of each of Brookfield Foods and Studleigh-Royd (together 'Perkins Chilled Foods') from Perkins Foods Group for a cash consideration of £80.6 million, payable at Completion. The cash consideration payable in relation to the Acquisition will be funded from Cranswick's new bank facilities. The acquisition of Perkins Chilled Foods represents an important step in Cranswick's future strategic development, providing Cranswick with increased critical mass (particularly in the growing UK cooked meats market), consolidating relationships with existing customers and giving access to a broader range of skills and product technologies. In view of its size, the Acquisition is conditional on approval by Shareholders. This approval will be sought at an extraordinary general meeting to be held on or around 6 January 2005. A circular setting out details of the Acquisition, together with notice of the Extraordinary General Meeting, will be posted to Shareholders shortly. Background to and reasons for the Acquisition Since 1998, Cranswick has evolved from its origins in agriculture, to that of a business which is now focused predominantly on the supply of fresh and processed food to the UK food retail, food manufacturing and food service sectors. This transformation has been effected through a combination of acquisitions and subsequent organic growth, with Cranswick now supplying a range of fresh pork, gourmet sausages, premium cooked meats, bacon, charcuterie and sandwiches to its customers from a number of production facilities in the UK. For the year ended 31 March 2004, Cranswick's Food division, which incorporates Cranswick's agribusiness activities, generated turnover of £240 million (including food product sales of £201 million), and represented almost 90% of overall Group sales. During this period of evolution, Cranswick has expanded by way of acquisitions into a number of new areas of activity within complementary market segments, where the Directors perceived the market dynamics / market characteristics to be attractive, and thus offered the potential for future growth. The Directors perceive the acquisition of Perkins Chilled Foods to be another important step in Cranswick's future strategic development. In particular, the Directors believe the acquisition of Perkins Chilled Foods will provide Cranswick with: • increased critical mass in the growing UK cooked meats market, including the premium pre-sliced and pre-packed market segment, an area which Cranswick has been targeting for future growth from its existing operations; • greater market share in relation to the supply of cooked meats to the major UK food retailers, continuing the trend of consolidation within the UK pig meats sector; • a broader range of products, enabling Cranswick to offer its customers a more comprehensive service across the UK cooked meats category; • opportunities for increased sales of fresh pork - Cranswick is an existing supplier of raw materials to Perkins Chilled Foods; and • access to the skills of Perkins Chilled Foods' management team, which the Directors believe will complement existing skills within the Cranswick Group. Information on Perkins Chilled Foods Perkins Chilled Foods is one of the UK's leading providers of cooked meats and poultry to the UK food retail and food service sectors. Perkins Chilled Foods' principal customers include a number of the major UK food retailers. Perkins Chilled Foods operates primarily from three production sites in the UK with a current workforce of approximately 900 people. For the year ended 31 December 2003, Perkins Chilled Foods generated operating profit before goodwill amortisation of £10.2 million on turnover of £114.9 million. As at 31 December 2003, Brookfield Foods and Studleigh-Royd had net assets of £8.3 million and £5.8 million respectively. Financial effects of the Acquisition The Board believes that the Acquisition will enhance the Company's earnings per share before goodwill amortisation for the year ending 31 March 20061. Financing of the Acquisition The cash consideration payable in relation to the Acquisition will be funded from Cranswick's new bank facilities. Directors and management of the Enlarged Group Martin Davey will remain as Executive Chairman of the Enlarged Group and Cranswick's other executive directors will continue to be responsible for their respective functions in the Enlarged Group. Cranswick also intends to appoint a further non-executive director in due course following completion of the Acquisition. Perkins Chilled Foods' senior management have entered into conditional service agreements with Brookfield Foods or Studleigh-Royd for a minimum of three years. These service agreements are conditional on Completion. (1) This statement should not be interpreted to mean that the Company's future earnings per share following the Acquisition will necessarily be greater than or equal to the Company's historical earnings per share. Current trading and prospects On 16 November 2004, Cranswick announced its interim results for the six months ended 30 September 2004. At that time, the Chairman commented that: 'The Company is well positioned to continue its growth. The strong cash generation of the business has enabled significant investment to be made in production facilities which will provide additional capacity and generate operational efficiencies to combat the challenges of the trading environment. The business has seen significant growth in sales in recent years and has experienced management teams in place at each of the operations seeking further opportunities to continue the successful and controlled development of the Company.' The Board looks forward to the Enlarged Group's financial and trading prospects for the current financial year with confidence. Cash placing Cranswick also announces that it is proposing to place 2,050,000 new Ordinary Shares at a price of 457 pence per new Ordinary Share to raise approximately £9.4 million, from institutional investors. The net proceeds from the Cash Placing will be used to reduce Group borrowings. Application will be made to the UK Listing Authority for the Placing Shares to be admitted to the Official List and to the London Stock Exchange for the Placing Shares to be admitted to trading on the London Stock Exchange's market for listed securities. The Cash Placing is conditional, inter alia, upon Admission occurring by not later than 22 December 2004. The Cash Placing is not conditional upon completion of the Acquisition. The Placing Shares will be issued and allotted credited as fully paid and will, when issued, rank pari passu in all respects with Cranswick's existing issued Ordinary Shares save that they will not rank for the proposed Cranswick interim dividend for the six months ended 30 September 2004 of 4.7 pence per Ordinary Share, which is payable on 21 January 2005 to Shareholders on the register of members of Cranswick on 26 November 2004. It is expected that Admission will become effective and that dealings will commence in the Placing Shares on 22 December 2004. Enquiries: Cranswick Tel: 01377 270 649 Martin Davey, Executive Chairman Bernard Hoggarth, Chief Executive, Food Mobile: 07836 703434 John Lindop, Finance Director Rothschild Tel: 0113 200 1900 James Fenwick Investec Tel: 020 7597 5000 Erik Anderson City Road Communications Tel: 07947 186 694 Paul Quade Rothschild, which is authorised and regulated by the Financial Services Authority, is acting exclusively for Cranswick and no-one else in connection with the Acquisition and will not be responsible to anyone other than Cranswick for providing the protections afforded to its customers or for providing advice in relation to the Acquisition or the contents of this announcement. APPENDIX 1 DEFINITIONS The following definitions apply throughout this announcement unless the context requires otherwise: 'Acquisition' proposed acquisition of Perkins Chilled Foods by Cranswick 'Admission' admission of the Placing Shares to: (i) the Official List; and (ii) trading on the London Stock Exchange's market for listed securities 'Board' or Directors of Cranswick 'Directors' 'Brookfield Brookfield Foods Limited Foods' 'Cash Placing' cash placing of 2,050,000 new Ordinary Shares at a price of 457 pence per new Ordinary Share to raise approximately £9.4 million 'Completion' completion of the Acquisition, which is expected to take place on or around 6 January 2005 'Cranswick' or the Cranswick plc 'Company' 'Cranswick Group' Cranswick and its subsidiary undertakings or the 'Group' 'Enlarged Group' Cranswick Group following completion of the Acquisition 'Extraordinary Extraordinary General Meeting of Cranswick to be held on or General Meeting' around 6 January 2005 'London Stock London Stock Exchange plc Exchange' 'Official List' Official List of the UK Listing Authority 'Ordinary ordinary shares of 10 pence each in the capital of Shares' Cranswick 'Perkins Chilled Brookfield Foods and Studleigh-Royd Foods' 'Perkins Foods Perkins Foods Holdings Limited and its subsidiaries Group' 'Placing Shares' 2,050,000 new Ordinary Shares proposed to be issued fully paid pursuant to the Cash Placing 'Rothschild' N M Rothschild & Sons Limited 'Shareholders' holders of Ordinary Shares 'Studleigh-Royd' Studleigh-Royd Limited 'UK' United Kingdom 'UK Listing Financial Services Authority acting in its capacity as the Authority' or competent authority for the purposes of Part VI of the 'UKLA' Financial Services and Markets Act 2000 This information is provided by RNS The company news service from the London Stock Exchange

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