Planet Organic Health Corp. Closes 11 Store U.S. Acquisition – Mrs Green’s

Edmonton, Alberta.  Mr. Darren Krissie, CFO of Planet Organic Health Corp.
(“Planet Organic”) – (TSX Venture Exchange – “POH”) is pleased to announce that Planet Organic has successfully closed its previously announced acquisition of Mrs. Green’s Natural Market Inc. (“Mrs Greens Natural Market”). 

Pursuant to the terms of an Equity Purchase Agreement dated July 3, 2007 between Planet Organic and the shareholders of Mrs. Green’s Natural Market, Planet Organic acquired 100% of the issued and outstanding common shares of Mrs. Green’s Natural Market for approximately $33.7 million USD including liabilities.  In order to facilitate the acquisition, Planet Organic incorporated a new wholly owned subsidiary, Planet Organic Holding Corp., which was formed under the laws of New York. Planet Organic also engaged Ares Capital Corporation to provide financing in support of the acquisition with a senior secured credit facility for an aggregate principal amount of $31,500,000 USD. The credit facility is governed by the terms of a Credit Agreement dated July 3, 2007 wherein all of the assets of Planet Organic and its subsidiaries, including Planet Organic Holding Corp. are subject to the terms of a general security agreement. In addition to the credit facility, Ares Capital Corporation arranged for a private placement of $11,000,000 USD of convertible senior secured notes which mature on July 3, 2014. The notes are convertible into Planet Organic common shares based on a conversion price of $3.33 C$ in whole or in part any time before July 3, 2012.  The notes are callable at anytime prior to maturity by Planet Organic.

In addition, the Corporation has also closed a $4,500,000 C$ non-brokered private placement of 1,800,000 Units at an issue price of $2.50 per Unit. Each Unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share for $3.25 until July 3, 2009.  A related party subscribed for 100% of the Units.

Upon closing of the acquisition Planet Organic also granted an aggregate of 862,000 stock options exercisable at $2.50 per share for five years to directors, officers, employees, consultants of Planet Organic and Mrs. Green’s Natural Market. In addition, pursuant to the term of an employment agreement, Planet Organic issued 200,000 common shares to a related party at a deemed issue price of $2.50 per common share. All common shares, warrants, stock options, and notes are subject to a statutory hold period expiring on November 4, 2007. 

About Mrs. Green’s Natural Market

Mrs. Green’s Natural Market is one of the leading natural and organic food retailers in the Northeastern U.S.  Based on audited financial statements for the year ended December  31, 2006, Mrs. Green’s Natural Market had revenue of $38,096,516, EBITDA(defined as earnings before interest, income taxes, depreciation and amortization) of $3,912,203 total assets of approximately $6,233,399, and working capital net of shareholder loans of $1,749,551. The privately held Company operates 11 stores located in the New York/Connecticut area.  Mrs. Green’s Natural Market’s owners and founders Harold and June Hochberger will be staying on to lead Planet Organic in their U.S. growth plans throughout the East Coast. Mrs. Greens Natural Market was represented in the transaction by Partnership Capital Growth, LLC, member NASD/SIPC, a San Francisco based financial advisory firm focused exclusively on capital raising and M&A support in the area of healthy, active and sustainable living.

ABOUT PLANET ORGANIC HEALTH CORP.

Planet Organic Health Corp. (TSX-V: POH), is a natural products industry company, comprising manufacturing, distribution and retail. Planet is listed on the TSX Venture Exchange as a Tier One company.  Planet operates eight natural food supermarkets throughout Canada under the Planet Organic Market banner.  The Company also operates 50 natural health outlets under the Sangster’s Health Centre banner and seven natural health outlets under the Healthy’s banner.  Another POHC company, Trophic Canada is the country’s leading manufacturer of natural supplements.  The Company has a total of 64 stores throughout the country and 11 stores in the United States.

Forward-Looking Statements

Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Planet. Many of these statements can be identified by looking for words such as “believe”, “expects”, “expected”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues”.  Planet Organic believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Planet Organic’s continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Planet Organic’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Planet Organic. Any forward-looking statements are made as of the date hereof and Planet Organic does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

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