/R E PE A T -- Lassonde Industries Inc. announces business combination with Clement Pappas and Company, Inc./

  • Lassonde Industries, one of Canada's leading marketers and manufacturers of fruit juices and drinks, combines with a leading U.S. producer of store brand fruit juices and drinks.
  • The transaction will create a major North American manufacturer in the fruit juice and drink category with coast-to-coast presence in Canada and the U.S.
  • Lassonde Industries and Clement Pappas demonstrate excellent strategic fit to fuel future growth.

ROUGEMONT, QC, June 17, 2011 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) announced today that it has entered into a definitive agreement, with members of the Pappas and Lassonde families, to acquire privately owned Clement Pappas and Company, Inc. ("Clement Pappas") of Carneys Point, New Jersey, for a total cash consideration of US$390 million payable at closing, subject to adjustments for working capital and other items.

Upon closing of the transaction, expected to occur in August 2011, Lassonde Industries will have a beneficial ownership of 71% of Clement Pappas. Of the remaining 29%, 19% will be held by members of the Pappas family and 10% by members of the Lassonde family.

Financial Terms

The acquisition will be financed through committed nonrecourse credit facilities under which an aggregate of US$253 million will be drawn at closing. Financing fees related thereto are estimated at US$7.4 million. Other fees related to the transaction are estimated at US$6.5 million. Lassonde Industries will invest approximately US$106 million for the transaction with the balance of US$44 million to be provided by members of the Pappas and Lassonde families. From the signing date, Lassonde Industries will have 60 days to complete the financing. The transaction is subject to customary terms and conditions, including a break-up fee and receipt of regulatory approvals.

"This transaction combines two premier fruit juice and drink manufacturers to form a North American category leader," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc. "It is aligned with our strategy of consistent, measured growth and enhances our overall position in the industry."

"This acquisition provides a platform for continued growth in the U.S. market through Clement Pappas' extensive coast-to-coast network," said Jean Gattuso, Chief Operating Officer of Lassonde Industries Inc. "The two Companies are very complementary and together will have a well diversified product offering."

Clement Pappas

Clement Pappas was founded in 1942 and is a family-owned corporation headquartered in Carneys Point, New Jersey. It operates five production facilities located in Seabrook, New Jersey; Baltimore, Maryland; Mountain Home, North Carolina; Springdale, Arkansas and Ontario, California. It also runs a cranberry receiving station in Carver, Massachusetts. Clement Pappas is the second largest producer of store brand ready to drink fruit juices and drinks in the United States and a major producer of cranberry juices, drinks and sauces.

Clement Pappas employs approximately 630 employees and, for the fiscal year ended September 30, 2010, had sales of US$390 million and adjusted EBITDA of US$60 million.

Clement Pappas will become a subsidiary of Lassonde Industries and maintain its headquarters in Carneys Point, New Jersey. It will continue to do business under the Clement Pappas name and will retain its existing management team.

"We are happy that we are joining an organization that is successful, shares our values and will continue the Clement Pappas legacy," said Dean C. Pappas, Chief Executive Officer of Clement Pappas and Company, Inc. "This transaction will help us better service our customers and remain true to our principles of quality, integrity, accomplishment and innovation. Equally important, we are confident that we will continue to operate with the highest standards in quality, food safety and environmental sustainability."

Clement D. Pappas, a third generation member of the Pappas family, has been named CEO of Clement Pappas, effective with the closing of the transaction. "I am honored and excited to lead Clement Pappas and Company into its next chapter, while carrying on the family legacy," said Pappas. "I couldn't think of a better partner than Lassonde. This combination will create great benefits for both companies as well for as our employees, customers, and suppliers." Dimitri Pappas, also a member of the third generation, has been named Executive Vice President of Human Resources and General Counsel.

"We are very pleased that the Pappas family will remain involved as significant shareholders and actively participate in operating the business along with the existing management team," continued Gattuso. "We have a deep respect for the Pappas family and the company they have built. We believe that partnering with them and the quality management team of Clement Pappas will ensure the continued tradition of excellence and success of the business."

Benefits of the Transaction

The acquisition of Clement Pappas will:

  • Provide increased critical mass to support national customers throughout North America and benefit from combined logistics, distribution, purchasing and other economies of scale.
  • Position Lassonde Industries as a major player in the fruit juice and drink category with a diversified product portfolio, an expanded customer base in both the store brand and national brand products, and a presence throughout the U.S. and Canada.
  • Provide growth opportunities and add extensive expertise in cranberry juice, drinks and sauces. The combined organization will offer product lines using a wide variety of processes and packaging for fruit juices and drinks.

Common cultures

Lassonde Industries and Clement Pappas share common values, including a strong commitment to innovation, quality and integrity. With a combined 162 years in business the companies also share a similar history. Both companies came from humble beginnings in the vegetable canning business and then branched out to become significant players in the fruit juices and drinks markets.

About Lassonde Industries Inc.

Lassonde Industries develops, manufactures and markets an innovative and distinctive line of fruit and vegetable juices and drinks as well as specialty food products such as fondue broth and sauces, soups, gravies, canned corn-on-the-cob, bruschetta toppings, tapenades, pestos and sauces for pasta and pizza. Lassonde Industries imports selected wines from several countries of origin for packaging and marketing purposes. It also imports olive oil. Nearly 1,300 employees contribute to the Company's growth and to offering quality products to customers. The Class A and Class B shares of Lassonde Industries Inc. are listed on the TSX exchange.

Websites:  
www.lassonde.com
www.clementpappas.com

Advisers

Lassonde Industries was advised by Jefferies & Company, Inc. as the exclusive M&A advisor for the transaction. Jefferies Finance LLC and BMO Capital Markets Corp. also advised Lassonde Industries regarding certain financing and structuring matters related to the transaction.

Conference call

Lassonde Industries will host a conference call on June 20 at 10:00 a.m. ET, to discuss the announcement, which can be accessed at the following numbers:

   

     


Montreal:  
Toronto:  
Toll Free:  
1-514-807-8791
1-416-644-3425
1-877-974-0445

The call will be recorded and accessible for playback on the Company website for a period of two weeks.

This press release contains forward-looking statements that are based on certain assumptions. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Additional factors are discussed in materials filed from time to time with the securities regulatory authorities in Canada. Lassonde Industries Inc. disclaims any intention or obligation to update or revise any forward-looking statements.

 

 

 

SOURCE LASSONDE INDUSTRIES INC.

For further information:

Investor contact
Guy Blanchette, CA, CMA
Vice-President and Chief Financial Officer
Lassonde Industries Inc.
450-469-4926, extension 10782

Media contact
Stefano Bertolli
Vice-President Communications
Lassonde Industries Inc.
450-469-4926, extension 10265

Profil de l'entreprise

LASSONDE INDUSTRIES INC.

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