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Landec's CEO Presents At Acquisition Of GreenLine Foods, Inc. Conference (Transcript)

This acquisition is immediately accretive and provides our Apio food business with critical mass to better serve both existing and new customers.

For Landec fiscal year beginning May 28, 2012 GreenLine’s revenue is estimated at approximately $95 million to $100 million annually and EBITDA is estimated to be between $10 million to a $11 million. In addition, we see operational and customer synergies that can be realized in the next 12 to 24 months.

The acquisition of GreenLine is consistent with our strategy of investing in our two core businesses, our food business and our biomedical materials business. We seek accretive investments that builds on our material science technology, as demonstrated by our Lifecore acquisition in 2010. We also seek to strengthen our channels of distribution to provide greater penetration of our products and markets we serve as demonstrated by our investment and Windset Farms in 2011 and now by our acquisition of GreenLine Foods in 2012.

Our continued focus is on profitably building and growing our core food and biomedical businesses, while periodically and selectively collaborating with key partners under technology licensing arrangements in areas outside of our core businesses.

Now some financial details. We acquired the stock of GreenLine for $63 million in cash with no assumed debt. The agreement also includes future earnout potential for Riverside of up to $7 million based on GreenLine achieving certain financial targets during calendar year 2012. In conjunction with the acquisition, Apio secured $31.8 million in term financing secured by Apio’s and GreenLine’s fixed assets.

In addition, Apio entered into a five year $25 million working capital line with an interest rate of LIBOR plus 2% based on the combination of Apio and GreenLine accounts receivable and eligible inventory balances.

The term debt is comprised of a $12.7 million equipment loan, which matures in seven years with a fixed interest rate of 4.37% and a $19.1 million real estate loan that matures in 10 years with a fixed interest rate of 4.02%. Both the term financing and the working capital lines are being financed by GE Capital.

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