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.
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
"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
"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 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
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
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.
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.
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
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
SOURCE LASSONDE INDUSTRIES INC.
For further information:
Guy Blanchette, CA, CMA
Vice-President and Chief Financial Officer
Lassonde Industries Inc.
450-469-4926, extension 10782
Lassonde Industries Inc.
450-469-4926, extension 10265