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December 11, 2000
SALINAS, Calif.--Monterey Pasta Co. (NASDAQ:PSTA) has acquired the assets of the Nate's polenta business from Elena's Food Specialties, a South San Francisco-based manufacturer of health foods and soy-based foods, for $450,000 in 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 the combined operations. The purchase provided Monterey Pasta with about 700 national 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 product will 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 gourmet refrigerated food products, and polenta fit well into Monterey's plan. "Polenta is a very good fit with Monterey Pasta's other products, which typically represent complementary dishes for Italian meal occasions," he said. Also, for a business of its size, Nate's has achieved strong penetration in some key retail accounts."
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