In a strategic move to bolster its position in the North American specialty food market, Lassonde Industries Inc. has announced an agreement to acquire Summer Garden Food Manufacturing for $235 million USD. This acquisition marks a significant step in Lassonde’s ambition to become a more diversified food and beverage powerhouse in North America.
Summer Garden, operated by The Zidian Group and based in Boardman, Ohio, is a renowned manufacturer and distributor of premium sauces and condiments. With a workforce of approximately 200 employees, the company has built a strong reputation for its high-quality products, including pasta sauces, BBQ sauces, dipping sauces, and dressings. The acquisition brings popular brands such as Gia Russa, Little Italy in the Bronx, and G Hughes – a leader in the sugar-free BBQ sauce segment – under the Lassonde umbrella.
The deal structure includes an initial payment of $235 million USD at closing, with the potential for additional payments of up to $45 million USD over the next three years, contingent on meeting certain financial targets and conditions. This approach aligns the interests of both parties and incentivizes continued growth and performance.
Financially, the acquisition appears promising for Lassonde. Summer Garden reported impressive figures for the 12-month period ending May 2024, with sales of $148 million USD and adjusted EBITDA of approximately $27.9 million USD. Lassonde expects the transaction to be accretive to margins and earnings, even before considering potential synergies. The company also anticipates that the acquisition’s internal rate of return will exceed its weighted-average cost of capital, indicating a sound financial investment.
Moreover, the transaction structure allows Lassonde to benefit from tax deductibility, generating an estimated $30 million USD in net present value. Post-acquisition, Lassonde projects its pro forma net debt to adjusted EBITDA ratio to remain under 2.20 to 1, providing ample room for future strategic initiatives.
Nathalie Lassonde, CEO and Vice-Chair of Lassonde’s board of directors, emphasized the strategic importance of the acquisition, stating that it supports the company’s ambition to diversify and grow its specialty food activities. She also highlighted the cultural alignment between the two family-owned businesses, noting their shared entrepreneurial spirit and commitment to stakeholders.
For Summer Garden, this acquisition ensures the continuation of its legacy under the stewardship of a larger, like-minded organization. Thomas Zidian, President and CEO of Summer Garden, expressed confidence that the partnership would benefit customers through enhanced products and offer employees new opportunities for development and advancement.
The acquisition is expected to close within 30 to 45 days, subject to regulatory clearance and other closing conditions. Lassonde plans to finance the transaction through its available credit facilities, demonstrating its strong financial position and commitment to growth.
This move by Lassonde Industries represents a significant consolidation in the specialty food sector and aligns with broader trends of larger food and beverage companies expanding their portfolios through strategic acquisitions. By integrating Summer Garden’s products, brands, and manufacturing capabilities, Lassonde is poised to enhance its market presence, diversify its product offerings, and potentially realize operational synergies.
As the food industry continues to evolve, with consumers increasingly seeking premium, specialized products, this acquisition positions Lassonde to capitalize on these trends and reinforce its status as a leading player in the North American food and beverage landscape.
