Monterey Pasta Buys Nate's Polenta From Elena's Foods 27276

Monterey Pasta Buys Nate's Polenta From Elena's Foods

SALINAS, Calif.--Monterey Pasta Co. (NASDAQ:PSTA) has acquired the assets ofthe Nate's polenta business from Elena's Food Specialties, a South SanFrancisco-based manufacturer of health foods and soy-based foods, for $450,000in cash and $13,000 in inventory. Elena shareholders could also benefit from an"earn-out," a payment based on the sales in the first year of thecombined operations. The purchase provided Monterey Pasta with about 700national distribution outlets, including a substantial private label business.The company now has more than 5,800 retail and club stores in the United States,Canada and the Caribbean. Under terms of a co-pack agreement, the Nate's productwill continue to be manufactured in Elena's facility.

Lance Hewitt, president and chief executive officer of Monterey Pasta,explained that the company has been attempting to diversify with gourmetrefrigerated food products, and polenta fit well into Monterey's plan."Polenta is a very good fit with Monterey Pasta's other products, whichtypically represent complementary dishes for Italian meal occasions," hesaid. Also, for a business of its size, Nate's has achieved strong penetrationin some key retail accounts."