Transaction will strengthen Lassonde's position in the specialty food segment
Conference Call to Discuss Acquisition: | |
OPEN TO: | Investors, analysts, and all interested parties |
DATE: | |
TIME: | |
CALL: | 1-844-763-8274 (for North American participants); |
1-647-484-8814 (for international participants) |
A live audio broadcast of the conference call will be available on the Corporation's website, on the Investors page or here: https://www.gowebcasting.com/13363. A replay of the webcast will remain available at the same link until midnight,
Located in
"The acquisition of Summer Garden supports our ambition to become a more diversified North American food and beverage company," said
Transaction Details
- For the 12-month period ending in
May 2024 , Summer Garden generated sales ofUS$148.0 million and adjusted EBITDA1 of approximatelyUS$27.9 million ; - The purchase price is
US$235.0 million payable in cash at closing, on a cash-free debt-free basis and is subject to customary balance sheet adjustments and other related adjustments; - An amount of up to
US$45.0 million may be payable in various instalments over the next three years, should certain financial targets be achieved and other conditions met; - The transaction structure will allow the Corporation to generate a benefit amounting to approximately
US$30.0 million , on a net present value basis, related to the tax deductibility of this investment; - The transaction is expected to be accretive to margins and earnings before synergy considerations. The acquisition's internal rate of return is expected to be higher than the Corporation's weighted average cost of capital;
- The transaction is not subject to a financing condition and will be financed through the Corporation's available credit facilities;
- Pro forma net debt to adjusted EBITDA1 ratio at closing is expected to be under 2.20:1, leaving sufficient headroom to continue the deployment of the Corporation's strategy;
- The transaction is subject to regulatory clearance and other closing conditions specified in the acquisition agreement and is expected to close within 30 to 45 days.
"We are excited with the expansion of our specialty food activities by adding a product portfolio, and capabilities that delivers an immediate path to growth at attractive and accretive margins," added
"This partnership ensures our legacy will continue to thrive," said
Canaccord Genuity /
Financial Measures Not in Accordance With IFRS
The financial measures or ratios, further described below, do not constitute standardized financial measures or ratios in accordance with the financial reporting framework used to prepare the Corporation's financial statements. These non-IFRS measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. Comparing them to similar financial measures or ratios presented by other issuers may not be possible.
EBITDA and Adjusted EBITDA
EBITDA is a financial measure used by the Corporation and investors to assess the Corporation's capacity to generate future cash flows from operating activities and pay financial expenses. Adjusted EBITDA is a financial measure used by the Corporation to compare EBITDA between periods by excluding items impacting comparability. EBITDA consists of the sum of operating profit and of the "depreciation of property, plant and equipment and amortization of intangible assets" item and "(Gains) losses on capital assets" item, as shown in the Consolidated Statement of Cash Flows. Adjusted EBITDA is calculated by adjusting the EBITDA with items considered by management as impacting the comparability between periods.
Net Debt to Adjusted EBITDA
Net debt to adjusted EBITDA is a financial measure used by the Corporation to assess its ability to pay off existing debt and define available borrowing capacity. To calculate the net debt to adjusted EBITDA ratio, net debt is divided by the sum of adjusted EBITDA from the last four quarters. Net debt represents long-term debt, including the current portion, less the "Cash and cash equivalents" item, as they are presented in the Corporation's Consolidated Statement of Financial Position.
About Summer Garden
Based in
About Lassonde
The Corporation is active in two market segments:
- Retail sales consist of sales to food retailers and wholesalers such as supermarket chains, independent grocers, superstores, warehouse clubs, major pharmacy chains; and
- Food service sales consist of sales to restaurants, hotels, hospitals, schools, and wholesalers serving these institutions.
The Corporation operates 18 plants located in
Caution Concerning Forward-Looking Statements
This document contains "forward-looking information" and the Corporation's oral and written public communications that do not constitute historical fact may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities law. These forward-looking statements include, but are not limited to, statements on the Corporation's objectives and goals and are based on current expectations, projections, beliefs, judgments, and assumptions based on information available at the time the applicable forward-looking statement was made and considering the Corporation's experience combined with its perception of historical trends.
Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "objective", "strategy", "likely", "potential", "outlook", "aim", "goal", and similar expressions suggesting future events or future performance in addition to the negative forms of these terms or any variations thereof. All statements other than statements of historical fact included in this document may constitute a forward-looking statement.
Various factors or assumptions are applied by the Corporation in elaborating the forward–looking statements. These factors and assumptions are based on information currently available to the Corporation, including information obtained by the Corporation from third parties. Readers are cautioned that the assumptions considered by the Corporation to support these forward-looking statements may prove to be incorrect in whole or in part.
The significant factors that could cause actual results to differ materially from the conclusions, forecasts or projections reflected in the forward-looking statements contained herein include, among other things, risks associated with the following: deterioration of general macroeconomic conditions, including international conflicts, which can lead to negative impacts on the Corporation's suppliers, customers, and operating costs; the availability of raw materials and packaging and related price variations (including the prices of orange juice and orange concentrates, key commodities for the Corporation, which have continued to trade above historical highs for the past several months and show no sign of favourable change); loss of key suppliers or supplier concentration; disruptions in or failures of the Corporation's information technology systems, as well as the development and performance of technology; cyber threats and other information-technology-related risks leading to business disruptions, confidentiality, data integrity, and business email compromise-related fraud; the successful deployment of the Corporation's multi-year strategy (defined in Section 4 - "Multi-Year Strategy" of the Corporation's MD&A for the first quarter ended
The Corporation's ability to achieve its sustainability targets and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well as the development, deployment and performance of technology and environmental regulation. The Corporation's ability to achieve its environmental, social and governance risk commitments is further subject to, among other factors, its ability to leverage its supplier relationships.
The assumptions, expectations, and estimates involved in preparing forward-looking statements and risks and uncertainties that could cause actual results to differ materially from forward-looking statements are discussed in the Corporation's materials filed with the Canadian securities regulatory authorities from time to time, including information about risk factors that can be found in Section 19 - "Uncertainties and Principal Risk Factors" of the Corporation's MD&A for the year ended
All forward-looking statements included herein speak only as of the date hereof. Unless required by law, the Corporation does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. All forward-looking statements contained herein are wholly and expressly qualified by this cautionary statement.
1 | This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section "Financial Measures Not in Accordance with IFRS" of this press release for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable. |
SOURCE Industries Lassonde inc.
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