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GNC Acquired by Ares Management LLC and Ontario Teachers' Pension Plan, Enters into $735.0 Million Senior Credit Facility, and Closes Offering of Seni

GNC Acquired by Ares Management LLC and Ontario Teachers' Pension Plan, Enters into $735.0 Million Senior Credit Facility, and Closes Offering of Senior Notes and Senior Subordinated Notes; Debt Tender Offers Expire

PITTSBURGH, March 16 // PRNewswire // -- GNC Parent Corporation ("GNC" or the "Company"), the largest global specialty retailer of nutritional supplements, announced today the completion of the acquisition of the Company by affiliates of Ares Management LLC ("Ares Management") and Teachers' Private Capital, the private investment arm of Ontario Teachers' Pension Plan Board, for a total enterprise value of $1.65 billion, subject to certain adjustments. The Company previously announced the merger agreement with GNC Acquisition Holdings Inc. and GNC Acquisition, Inc., affiliates of Ares Management and Teachers' Private Capital, pursuant to which the Company is the surviving corporation and is now a wholly owned subsidiary of GNC Acquisition Holdings Inc.

In conjunction with the merger, General Nutrition Centers, Inc., a wholly owned subsidiary of the Company ("Centers"), announced today that it entered into a $735.0 million Credit Agreement with a syndicate of financial institutions. The agreement provides for a $675.0 million term loan and a $60.0 million revolving credit facility. The loans are secured by first priority pledges of the equity interests of Centers, its domestic subsidiaries and certain of its foreign subsidiaries and first priority liens on substantially all of the assets of the domestic subsidiaries of the Company, including Centers. The term loan matures in September 2013 and the revolving loan matures in March 2012. The term loan and an initial borrowing of approximately $10.4 million under the revolving credit facility provide for alternative interest rates at Centers' election, including interest at a rate of Libor plus 2.25%, which is currently the effective rate under the term loan. J.P. Morgan Securities Inc. and Goldman Sachs Credit Partners L.P. acted as co-lead arrangers and J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as joint book-running managers. Goldman Sachs Credit Partners L.P. is the syndication agent and J.P. Morgan Chase Bank, N.A. is the administrative agent.

Centers also announced today the closing of its previously announced offering of $300.0 million in aggregate principal amount of senior floating rate toggle notes due 2014 (the "Senior Notes") and $110.0 million in aggregate principal amount of 10.75% senior subordinated notes due 2015 (the "Senior Subordinated Notes" and, together with the Senior Notes, the "Notes"). The Senior Notes were issued at 99% of par, and the Senior Subordinated Notes were issued at par.

The offering of the Notes was conditioned on the closing of the acquisition of the Company. The proceeds from the sale of the Notes, together with borrowings by Centers under the new senior credit facility described above, were used to finance a portion of the transactions in connection with the acquisition, including repayment of certain of Centers' and the Company's existing debt.

Interest on the Senior Notes is payable and reset semiannually. Centers may elect to pay interest on the Senior Notes entirely in cash, entirely by increasing the principal amount of the Senior Notes or issuing new notes ("PIK Interest"), or on 50% of the outstanding principal amount of the Senior Notes in cash and on 50% of the outstanding principal amount of the Senior Notes in PIK Interest. Cash interest on the Senior Notes accrues at six-month LIBOR plus 4.5%, and PIK Interest, if any, will accrue at six-month LIBOR plus 5.25%. The Senior Subordinated Notes bear interest, payable semiannually and entirely in cash, at a rate per annum equal to 10.75%.

The Senior Notes are unsecured senior obligations of Centers, and are guaranteed on an unsecured senior basis by each of Centers' United States subsidiaries. The Senior Subordinated Notes are senior subordinated unsecured obligations of Centers, and are guaranteed on a senior subordinated unsecured basis by each of Centers' United States subsidiaries.

The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

The Company also announced today that its previously announced cash tender offer to purchase any and all of its outstanding Floating Rate Senior PIK Notes due 2011 (CUSIP Nos. 38012V-AA-5 and 38012V-AB-3) (the "PIK Notes") expired at 12:00 midnight, New York City time, on March 15, 2007 (the "Expiration Time") with 100% of the PIK Notes tendered. As previously announced on March 5, 2007, the Company received tenders and consents from a majority in principal amount of the PIK Notes. A supplemental indenture to the indenture governing the PIK Notes was executed on March 5, 2007 and is operative today. The Company today made payment for the PIK Notes validly tendered pursuant to the terms of the tender offer. Based on the 100% tender, the Company effected a cancellation and discharge of the PIK Notes.

In addition, Centers announced today that its previously announced cash tender offer to purchase any and all of each of its outstanding 85/8% Senior Notes due 2011 (CUSIP No. 37047R-AE-7) (the "Centers Senior Notes") and 81/2% Senior Subordinated Notes due 2010 (CUSIP No. 37047R-AC-1) (the "Centers Senior Subordinated Notes" and, together with the Centers Senior Notes, the "Centers Notes") expired at the Expiration Time with 100% of the Centers Senior Notes tendered and 98.9% of the Centers Senior Subordinated Notes tendered. As previously announced on March 5, 2007, Centers received valid tenders and consents representing a majority of the aggregate principal amount of each of the Centers Notes. Supplemental indentures to the indentures governing each of the Centers Notes were executed on March 5, 2007 and are operative today. Centers today made payment for the Centers Notes validly tendered pursuant to the terms of the tender offers. Based on the 100% tender of the Centers Senior Notes, Centers effected a cancellation and discharge of the Centers Senior Notes.

Centers also announced that it elected to effect a covenant defeasance and redemption of all of the outstanding Centers Senior Subordinated Notes not purchased in its cash tender offer. The Company has deposited cash in an irrevocable trust with U.S. Bank National Association, as trustee, in an amount sufficient to provide for the redemption of the Centers Senior Subordinated Notes on December 1, 2007, in accordance with their terms at 104.25% of their principal amount, plus accrued and unpaid interest.

Centers today filed a Form 15 with the SEC to formally suspend its reporting requirements based on cancellation and discharge or defeasance of the Centers Notes. Pursuant to the terms of the indentures governing the Notes, Centers will furnish the holders of the Notes reports that would be required to be filed with the SEC. Centers intends to provide noteholders with a Form 10-K Equivalent on or before April 15, 2007, which will be posted on GNC's website.

This press release does not constitute an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consents with respect to any securities.

About GNC

GNC, headquartered in Pittsburgh, Pa., is the largest global specialty retailer of nutritional products, vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products. GNC has more than 4,800 retail locations throughout the United States (including more than 1,000 franchise and 1,200 Rite Aid store-within-a-store locations) and franchise operations in 48 international markets. The Company -- which is dedicated to helping consumers Live Well -- also offers products and product information online.

About Ares Management

Ares Management is a private investment firm with approximately $12 billion of assets under management. Founded in 1997, Ares Management specializes in managing assets in both the private equity and leveraged finance markets. Ares Management's private equity activities are conducted through the Ares Corporate Opportunities Funds ("ACOF"). ACOF's retail and consumer product portfolio companies include National Bedding Company (Serta), Samsonite Corporation, Orchard Supply Hardware Stores Corp., Maidenform Brands, Inc. and Anchor Blue Retail Group, Inc. Ares Management's leveraged finance activities in the U.S. and Europe are conducted through its Capital Market Group and its management of Ares Capital Corporation (NASDAQ: ARCC), a publicly traded business development corporation. Ares Management's expertise enables the firm to structure investments to meet the specific needs of companies rather than the less flexible demands of the public markets. The firm has over 150 employees and offices in Los Angeles, New York and London (http://www.aresmgmt.com/).

About Ontario Teachers' Pension Plan

Teachers' Private Capital is the private investment arm of the US$85 billion Ontario Teachers' Pension Plan, an independent corporation responsible for investing the fund and administering the pensions of Ontario's 264,000 active and retired teachers. With more than US$12 billion in assets, Teachers' Private Capital is one of North America's largest private investors, providing capital for large and mid-cap companies, infrastructure assets as well as venture capital for developing industries. It has completed a number of major retail and consumer product transactions, including Shoppers Drug Mart Corporation, Easton-Bell Sports Inc., Samsonite Corporation, National Bedding Company (Serta) and Doane Pet Care Company. Other notable private investments include Yellow Pages Group, Maple Leaf Sports & Entertainment and Alliance Laundry Holdings.

Cautionary Statement on Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business that is not historical information. Forward-looking statements can be identified by the use of terminology such as "subject to," "believes," "anticipates," "plans," "expects," "intends," "estimates," "projects," "may," "will," "should," "can," the negatives thereof, variations thereon and similar expressions, or by discussions of strategy. GNC believes there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain, we may not realize our expectations and our beliefs may not prove correct. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results could differ materially from those described or implied by such forward-looking statements. Factors that may materially affect such forward- looking statements include, among others:

- significant competition in our industry;
- unfavorable publicity or consumer perception of our products;
- the incurrence of material products liability and product recall costs;
- costs of compliance and our failure to comply with governmental
regulations;
- the failure of our franchisees to conduct their operations profitably
and limitations on our ability to terminate or replace under-performing
franchisees;
- economic, political and other risks associated with our international
operations;
- our failure to keep pace with the demands of our customers for new
products and services;
- the lack of long-term experience with human consumption of some of
ingredients in some of our products;
- disruptions in our manufacturing system or losses of manufacturing
certifications;
- increases in the frequency and severity of insurance claims,
particularly for claims for which we are self-insured;
- loss or retirement of key members of management;
- increases in the cost of borrowings and unavailability of additional
debt or equity capital;
- the impact of our substantial indebtedness on our operating income and
our ability to grow;
- the failure to adequately protect or enforce our intellectual property
rights against competitors;
- changes in applicable laws relating to our franchise operations; and
- our inability to expand our franchise operations or attract new
franchisees.

SOURCE: GNC Parent Corporation

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