CSM reaches definitive agreement to purchase CGI Desserts (Camelot Desserts)

CSM has reached an agreement, in principle, with the owners of CGI Desserts, Inc. to acquire CGI Desserts, Inc.  CGI is a leading supplier of Thaw & Serve, fully decorated cakes and upscale dessert cakes.  The cake category represents the largest and fastest growing segment in In-store bakeries. CGI operates one production location, based in Sugar Land (Houston), Texas, USA, and employs approximately 400 employees.  Its current sales amounts to approximately $65 million.  Camelot has a strong record of delivering sales growth with an average annual growth of 10% over the last few years.

Significant growth opportunities exist for CSM and CGI.  The leverage of the CGI capabilities through the Brill salesforce will deliver significant growth in both the In-store and Foodservice market segments.

Starting in 2004, CSM Bakery Supplies North America (BSNA) went through a reorganization and consolidation phase, which was executed successfully.  The main activity included the merger of H.C. Brill, Henry & Henry and Baker & Baker into one company, H.C. Brill.  In addition, all distribution activities were concentrated into one USA-wide operating company, BakeMark USA.  Recently, the merger of American Ingredients and Caravan Products was announced.  In the Supply Chain, several factory closures have been completed as well.

In recent years, BSNA has improved its operational results considerably.  BSNA has a proven track record of being able to create synergies.  With the acquisition of CGI, BSNA significantly strengthens its ability to generate future organic growth.

During the BSNA strategic planning stage, the Thaw & Serve, Decorated Cakes and Upscale Dessert Cakes category was deemed the number one growth area.  The market size in In-store and Foodservice for this product segment is estimated to be approximately $1.5 billion.  H.C. Brill already has a position in this category and, with the addition of CGI, CSM will be one of the leaders in the In-store channel.

CSM expects to close the transaction, which is subject to regulatory review, by September 1, 2006.