Presentation to:

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Presentation to University of Illinois Finance
321 Prof. Stephen DArcy February 7, 2007
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Merrill Lynch Co. Investment Banking
A Sample of Our Consumer Relationships
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Pilgrims Pride Corporation Hostile Takeover of
Gold Kist, Inc.
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Pilgrims Pride / Gold Kist Case Study

• 21.00 all cash offer represented final in a
  series of 9 public/private offers starting with
  interest during the IPO process
• PPC pursued Gold Kist for three years before
  turning hostile
• Created largest poultry company in US
• 62 of premium to pre-offer stock price (August
  18, 2006)
• Total Valuation 1,145,000,000
• Forward P/E 25.3x Forward EV/EBITDA 8.7x

____________________ Source Wall Street research.
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Pilgrims Pride / Gold Kist Case Study
Gold Kist as an Independent Company
Company Overview

• 3 position player in the 30 bn U.S. chicken
  industry
• 2006 revenue of 2.1 bn and EBITDA 33.1 mm (2005
  EBITDA of 265 mm)
• Converted from farmer-owned cooperative via
  October 2004 Initial Public Offering
• Largest private label supplier of chicken in the
  U.S. 75-year history
• Fully integrated production processes over
  14,700,000 birds weekly
• Over 16,500 employees and 2,300 family growers
• 100 owned production facilities in Southeast
  U.S.

Rolling Latest Twelve Months EBITDA ( in mm)
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Pilgrims Pride / Gold Kist Case Study
Transaction Highlights

• On December 4, 2006 Pilgrims Pride announced the
  acquisition of Gold Kist for 21.00 per share in
  cash
• Agreed upon price represents a 20 increase over
  Pilgrims Pride initial bid of 17.50 per share
  made on February 23, 2006
• Culmination of unsolicited takeover which began
  on August 18, 2006
• Transaction creates the leading chicken company
  by weight and third-largest meat/protein company
  in the U.S.
• One of the largest-ever acquisitions in the U.S.
  poultry industry
• Closed on January 8, 2007 with 50 mm in
  announced synergies PPC announced revised
  synergies estimate of 100 mm on January 30, 2007
• Merrill Lynch acted as lead financial advisor to
  Gold Kist throughout the transaction process and
  rendered a fairness opinion to the Board of
  Directors.

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Pilgrims Pride / Gold Kist Case Study
Offer Summary
____________________ (1) Inclusive of 51.0mm
shares, 0.5mm stock-settled stock appreciation
rights and 0.4mm performance shares. (2) Net
debt as of September 30, 2006.
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Pilgrims Pride / Gold Kist Case Study
Gold Kist Share Price History
____________________ Source FactSet as of
December 4, 2006.
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Pilgrims Pride / Gold Kist Case Study
Share Price Performance Post Offer
Since Hostile Bear Hug Letter (August 18, 2006)
____________________ Source FactSet as of
January 4, 2007.
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Pilgrims Pride / Gold Kist Case Study
Relative Valuation Metrics
As a of Pilgrims Pride
21.00 Deal(1)
82.7
As a of Sanderson Farms
75.8
As a of Tyson
132.9
____________________ Source FactSet as of
December 4, 2006. (1) Percentages based on
peers December 1, 2006 closing price.
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Pilgrims Pride / Gold Kist Case Study
Research Analyst Perspectives
We calculate that the dealcould be accretive to
Pilgrims Pride by roughly 0.34 per share in
calendar 2007we believe when fully realized,
total synergies from the deal will approximate
75 million rather than the 50 million the
company is currently targeting. Wall Street
Research December 4, 2006
Despite challenging chicken fundamentals, PPCs
acquisition of GKIS is strategically sound and
likely will create long-term shareholder value as
PPC would not only overtake TSN as the largest US
chicken processor, but also would gain improved
access to the Southeast and the retail
segment. BMO Capital Markets December 5, 2006
this is not the first time PPC has boosted its
market position by swallowing the next largest
competitor. In November 2003, PPC acquired CAGs
chicken division for 635 million. The initial
cost synergy estimate for the CAG acquisition was
50 million by the end of FY04 PPC had
identified 125 million in overlapping costs as
well as additional synergies. Based on the
company's history of providing conservative
synergy guidance, we believe the 50 million
synergy estimate related to the Gold Kist merger
may be low. Stifel Nicolaus December 6, 2006
Consolidation is necessary in the fragmented
(chicken) industry for several reasons including
(1) the very quick cycle associated with chicken
genetics, (2) the likelihood of structurally
higher feed cost as more corn is used for
ethanol, (3) consolidating retailer / customer
base and (4) the probability of more competition
from international players. To the extent this
transaction obviously helps consolidation in a
challenging industry, it is a good development in
our opinion. Deutsche Bank December 4, 2006
____________________ Source Wall Street research.
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Sara Lee Corporation Spin-off of Hanesbrands to
Shareholders
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4.5 Billion Spin-off of Hanesbrands to Sara Lee
shareholders
Transaction Overview

• Hanesbrands spin-off was the largest and most
  significant piece of Sara Lees Transformation
  Plan
• Tax-free spin-off of 100 of Hanesbrands to Sara
  Lee shareholders
• Hanesbrands used net proceeds from a 3.1 bn debt
  financing to pay a special dividend of 2.4 bn to
  Sara Lee and for general corporate purposes
• Created the largest apparel essentials company
  with annual sales of approximately 4.5 bn
• Largest Consumer Products subsidiary redeployment
  since Altria/Kraft IPO in 2001 and largest
  Consumer Products high yield debt raise since
  1998
• Merrill Lynch acted as joint lead arranger and
  joint bookrunner on 2.15 billion Senior Secured
  Credit Facilities, consisting of a 500 million
  Revolving Credit Facility, 250 million Term Loan
  A and 1.4 billion Term Loan B, and 450 million
  Second Lien Credit Facility

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4.5 Billion Spin-off of Hanesbrands to Sara Lee
shareholders
Shareholder Value Creation
Key Brands
The spin-off of Hanesbrands from Sara Lee has
resulted in approximately 2.4 billion of
increased shareholder value (19) for SLE equity
owners
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4.5 Billion Spin-off of Hanesbrands to Sara Lee
shareholders
Market Capitalization
Relative Share Price Performance
____________________ (1) Source Form 10 and
Wall Street research. (2) Assumes pro forma
interest expense of 202 mm per Wall Street
research.
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4.5 Billion Spin-off of Hanesbrands to Sara Lee
shareholders
Transaction Summary
Wall Street Commentary

• Shares could represent a unique opportunity to
  participate in a management buyout/leveraged
  buyout-type investment vehicle, as HBI management
  comes out from under the Sara Lee regime with
  significant opportunity to create value
• We believe HBI could generate significantly more
  value creation as a stand-alone entity
• Once out from under Sara Lee, the independent
  HBI business may be reinvigorated with new energy
  as it sheds its dead man walking status. Under
  Sara Lee control, HBI appears to have been
  managed largely for cash generation and has
  withstood a number of years of underinvestment.
  The recent uptick in the Hanes brands
  visibility, to coincide with the spin-off, has
  not gone unnoticed, and we look forward to
  continued increased investment in HBIs brands

Pre-Spin
Post-Spin
SLE Shareholders
SLE Shareholders Hold 2 Securities
100
100
SLE
SLE
2.4B dividend
100
100
100
OtherBusinesses
OtherBusinesses
HBI
HBI

• Sara Lee forms Hanesbrands in advance of spin-off
• HBI raises debt and pays a cash dividend of
  2.4bn to SLE
• SLE shareholders receive 1 HBI share for every 8
  shares of SLE held

____________________ (1) Source Form 10 and
Wall Street research. (2) Assumes pro forma
interest expense of 202 mm per Wall Street
research.
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4.5 Billion Spin-off of Hanesbrands to Sara Lee
shareholders
Branded Apparel Comparable Publicly Traded
Companies
As of January 31, 2007 ( in Millions)
____________________ (1) Equity Market Value
Fully Diluted Shares Outstanding (Treasury
Method) Closing Share Price. (2) Enterprise
Value Equity Market Value Preferred Equity at
Liquidation Value (Incl. Redeemable) Short-Term
Debt Long-Term Debt Minority Interest - Cash
Marketable Securities. (3) Earnings estimates
obtained from First Call and calendarized to
December. Five year growth rates obtained from
I/B/E/S.
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Clayton Dubilier Rice / Alberto-Culvers
Sponsor Spin-Off
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Alberto-Culver CompanySituation Overview
Separation Rationale
Separation Rationale
Alberto-Culver

• Eliminate channel conflicts
• Enhance business focus
• Better align incentive awards
• Superior strategic alternative
• Liquidity to shareholders today
• Continued participation in SBH and New ACV upside
• Role of CDR and expected contribution on
  operational / strategic front
• Favorable tax treatment
• Other considerations
• Limited buyer interest in entire company (Regis
  process)
• Family management and shareholder issues

Consumer Business(New ACV) FY 06E Revenue
1,426mm FY 06E EBIT 121mm
Sally Beauty Holdings(SBH) FY 06E Revenue
2,378mm FY 06E EBIT 247mm
Business Description
Comparable Companies
Comparable Operating Metrics
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Alberto-Culver CompanySummary Financials
ACV Consolidated
New ACV (Consumer)
in Billions
EBIT Margin
in Billions
EBIT Margin
Sally Beauty Holdings
in Billions
EBIT Margin
Revenue Growth 9.1 12.7 8.4 6.7 8.6 9.1 EBIT
Growth 17.6 7.6 9.2 11.1 11.3
____________________ Note Historical financials
based on company filings and exclude one-time
charges. Projected financials are based on Wall
Street research.
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Alberto-Culver CompanySponsor Spin Transaction
Overview

• Alberto-Culver (ACV) announced on June 19, 2006
  its plan to split its Consumer Products and
  Distribution units into independent public
  companies
• The transaction was completed on November 16,
  2006
• ACV shareholders received a 25 per share special
  cash dividend plus one share each in both the
  Consumer (New ACV) and Sally/Beauty Systems
  Group Distribution (SBH) businesses via a
  tax-free spin-off of the consumer business
• Clayton, Dubilier Rice (CDR), a private
  equity firm, invested 575 million to obtain a
  47.5 equity stake in SBH
• Alberto-Culver shareholders now own approximately
  52.5 of the shares in SBH
• The transaction valued SBH, including 1.85
  billion of debt, at approximately 3.0 billion at
  the time of announcement
• Merrill Lynch originated the transaction, acted
  as sole MA advisor to CDR and arranged 1.85
  billion of debt financing

The transaction has created two separate and
independent public companies and delivered
approximately 850 million in increased value to
ACV shareholders
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Alberto-Culver Company
Transaction Value ( in mm, except per share)
____________________ (1) Based on Wall Street
research. SBH and New ACV estimates are pro
forma for separation, new debt issuance, and
special dividend. (2) Implied share price for New
ACV determined by subtracting CDR offer price
for SBH and the 25.00 dividend from trading
price of Alberto-Culver on 6/19/06. (3) Current
Price for the consolidated entity represents a
sum of the parts.
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Alberto-Culver Company
Existing Company
Recapitalization of Alberto-Culver
100
Alberto-Culver
Cash
Cash Dividend
47.5 Equity Interest in Sally Holdings
Alberto-Culver
SBH
New ACV
New Debt

• New ACV contains Alberto-Culvers Consumer
  Businesses
• Sally Beauty Holdings (SBH) contains Sally Beauty
  Supply and Beauty Supply Group segments

• Alberto-Culver incurs 1.85 billion in debt
• CDR acquires 47.5 equity interest in ACV
  (ex-Consumer)
• Alberto-Culver pays cash dividend to ACV
  shareholders (except Sponsor)

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Alberto-Culver Company
Spin-off of New ACV (Consumer)
Pro-forma
ACV Shareholders
Equity Interest
52.5
52.5
100
47.5
100
-
Culver
New ACV
New
SBH
Sally Holdings
ACV

• New ACV is spun-off to ACV shareholders
• Transaction is not viewed as change of control
  from IRS taxation perspective

• Pro forma for the transaction, ACV shareholders
  receive
• 100 ownership in New ACV (Consumer)
• 52.5 interest in SBH stub equity
• Cash dividend of 25.00 per share

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Alberto-Culver Company
New ACV Pro-Forma Capitalization
SBH Pro-Forma Capitalization
The transaction has created two separate and
independent public companies and delivered a 21
increase in value to ACV Shareholders
____________________ Note Dollars in millions.
Source Offering Memorandum, merger proxy and
Wall Street research. (1) Excludes 28.2 and 9.4
million of cash to be used to fund accrued and
unpaid pre-closing SBH income taxes and specific
unpaid non-operating liabilities,
respectively. (2) Adjusted debt equal to
operating leases capitalized at 8x rent expense.
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Alberto-Culver CompanyValue Creation
Sum of the Parts Valuation
SBH and New ACV Trading Performance
ACH18.6
SBH16.8
Premiums Analysis
____________________ (1) 11/17/06 and 1/31/07
prices reflects sum of 25.00 special dividend
and trading prices of SBH and New ACV.