Business Description

Associated Brands is a leading North American manufacturer and supplier of private-label dry blend food and household products that sells to 45 of the 50 largest North American food retailers. Associated Brands' principal focus is on manufacturing dry blend food products such as flavoured drink mixes, iced tea, hot chocolate drinks, dessert mixes, soups, bouillon, side dishes and sweeteners. Associated Brands has grown to become one of the three largest suppliers of a diverse range of private-label dry-blend food products in North America, producing over eleven million cases annually.

Investment History

TorQuest's initial investment in Associated Brands was through an exchangeable debenture in November 2005, when Associated Brands was a publicly traded income fund. In May 2007, TorQuest successfully completed a going private transaction, following a board supported bid to acquire all of the operating subsidiaries of the income fund.

Investment Thesis

TorQuest has invested in Associated Brands based on its strong customer base, diverse portfolio of stable products, strong recent sales momentum, and opportunities for efficiency enhancements and related acquisitions. We believe the privatization will prove to be beneficial; as a small, underperforming public company, the Company was unable to attract the capital necessary to make efficiency enhancing investments nor related acquisitions to gain scale or scope. The Company was also burdened by substantial public company costs that given its small size represented a significant strain on cash flow. Prior to the going private transaction, TorQuest was instrumental in the hiring of a new Executive Chairman who has made, and is planning a number of significant changes that will lead to enhanced profitability.

http://www.associatedbrands.com

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