Rougemont, Quebec, October 29, 2019 – Lassonde Industries Inc. (TSX: LAS) (“Lassonde” or the “Company”) announced today that two of its subsidiaries have entered into an agreement with subsidiaries of The Jim Pattison Group (“JPG”), to acquire Sun-Rype Products Ltd. (“Sun-Rype”), a Canadian fruit-based snack and beverage manufacturer headquartered in Kelowna, British Columbia, and its two US affiliates located in Selah and Wapato, Washington State, for a cash consideration of approximately $80 million, subject to working capital adjustments and other adjustments, payable upon closing of the transaction. The cash consideration reflects excess working capital estimated at $7 million. As part of the transaction, Lassonde will assume $21 million in lease liability related to long-term leases for the facilities located in Kelowna, Selah and Wapato.
Sun-Rype generated sales of approximately $164 million and an adjusted EBITDA of approximately $9 million for the 12-month period ending on September 30th, 2019. The acquisition will be financed by Lassonde’s Canadian existing credit facility and is subject to customary conditions including the approval of the Competition Bureau. Closing of the transaction is expected towards the end of 2019. Lassonde’s transaction costs are estimated at $1.5 million.
“It is with great pride and enthusiasm that we look forward to welcoming Sun-Rype’s management team and employees to Lassonde. Sun-Rype and Lassonde are two great Canadian companies with decades of strong presence in the food and beverage industry in North America. This transaction is part of our strategy of constant and measured growth and will strengthen our presence in the Canadian and U.S. markets,” said Nathalie Lassonde, Chief Executive Officer of Lassonde Industries Inc.
Jim Pattison, Chairman and CEO of The Jim Pattison Group, said, “Lassonde is a very well respected and established Canadian company, which has been in business for over 100 years. It has been a key supplier to several of our companies, including Save-On-Foods and Buy-Low Foods for decades, and will continue to be. Lassonde is a first-class growing company with an excellent track record. Sun-Rype is in good hands with Lassonde.”
“Sun-Rype is a recognized and respected brand in the market, and Lassonde intends to keep it alive for a very long time,” said Jean Gattuso, President and Chief Operating Officer of Lassonde Industries Inc. “By joining forces, Lassonde and Sun-Rype will be well positioned to become a leading fruit-based snack and beverage company in Canada and the U.S. Hence, they will be able to provide a greater range of products to all Canadian and U.S consumers and retailers from coast to coast.”
Lesli Bradley, President of Sun-Rype, said, “Lassonde’s rich history in the marketplace and its growth and diversification makes it a strong leader in the industry. Adding the Sun-Rype brand and infrastructure to Lassonde will strengthen Sun-Rype and provide it, its employees and customers with great opportunities for the future.”
Benefits of the transaction
The acquisition of Sun-Rype will:
– Improve Lassonde’s manufacturing footprint in Western Canada and in the North-Western United States;
– Further strengthen the Company’s presence in the Canadian branded juices and drinks sector;
– Enhance the commercial network of both companies, therefore improving support to national retailers throughout Canada; and,
– Increase the access to the complementary types of products offered by the combined entities to Canadian retailers and consumers, with a growth possibility for the North American market.
About Sun-Rype Products Ltd.
Sun-Rype Products Ltd. is a Canadian fruit-based snack and beverage manufacturer. Since its foundation in 1946, Sun-Rype has been producing juices and fruit snacks in?Kelowna,?British Columbia, in the?Okanagan Valley. It also operates two other facilities located in Selah, and Wapato, Washington, United States.
Sun-Rype manufactures and sells, a variety of ready-to-drink fruit based juices and drinks under the Sun-Rype brand and fruit-based snacks under the Sun-Rype,
Fruit to Go, FruitSource and Good Bites brands. Its customers include grocery stores, club stores, and mass merchandisers, as well as wholesalers and drug stores.