United Natural Foods, Inc. and Millbrook Distribution Services Inc. Announce Definitive Merger Agreement

08/10/07 United Natural Foods, Inc. and Millbrook Distribution Services Inc, a privately held subsidiary of Distribution Holdings, Inc., announced a definitive merger agreement whereby UNFI Merger Sub, Inc., a wholly-owned subsidiary of United Natural Foods, Inc., will acquire all the outstanding shares of Distribution Holdings Inc. The financial terms of the transaction were not disclosed. The transaction is expected to close within the next 30 days and is subject to customary closing conditions, including compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The proposed transaction will accomplish several strategic objectives for United Natural Foods, including accelerating the Company's expansion into a number of high-growth business segments and establishing an immediate market share in the fast-growing Specialty Foods market. Millbrook's robust customer base will significantly enhance United Natural Food's conventional supermarket business channel; while both organizations' complementary product portfolios represent significant opportunities for cross-selling.

"This pending transaction demonstrates our commitment to profitably grow the Company while extending our competitive advantages and increasing shareholder value," commented, Michael Funk, President and Chief Executive Officer of United Natural Foods. "This combination will achieve our stated goal to increase the Company's footprint in the Specialty Foods segment and will extend the breadth, scale and capabilities of our distribution network."

Established in 1960 and headquartered in Leicester, MA, Millbrook is a full-line distributor with a substantial specialty food business consisting of ethnic, kosher, gourmet, organic and natural foods and also offers customers an extensive selection of health and beauty care items, including a full-line of national and branded products.

With annualized revenues in excess of $300 million, Millbrook distributes more than 22,000 specialty food items, and over 20,000 health and beauty care items and other non-food items to more then 9,000 retail locations. Customers include independent store retailers, as well as regional and national supermarket, mass merchandisers and chain drug stores, in 48 states. Millbrook's distribution network features four distribution centers, representing over 1.6 million square feet of warehouse space, located in Harrison, AR (1.2 million square feet); Leicester, MA (188,000 square feet); East Brunswick, NJ (177,600 square feet) and Tampa, FL (65,000 square feet).

Robert A. Sigel, Millbrook's President and Chief Executive Officer, will continue to oversee the operations of Millbrook once the merger with United Natural Foods is completed. Mr. Sigel commented, "We are very pleased to be announcing this transaction, which we believe clearly serves the best interests of the customers and  employees of both companies. Millbrook will have significant growth opportunities as part of United Natural Foods and we look forward to leveraging the combined sales and distribution platforms."

Mr. Funk added, "Millbrook promises to be a significant addition to our organization and we're excited to welcome Bob Sigel, Millbrook's employees and their customers to United Natural Foods."

Upon completion of the transaction, United Natural Foods will host a conference call with investors. Credit Suisse Securities (USA) LLC acted as financial advisor to United Natural Foods.