Lassonde Industries has entered into an agreement to increase its stake in Clement Pappas and Company (CPC), a leading private brand supplier of cranberry sauces and beverages, from 70.7% to 84%. The deal is valued at $21.2m.
Lassonde has agreed with members of the Pappas family to purchase all of the shares of CPC held by the Pappas family members other than Clement David Pappas, a long-time CPC executive and its current CEO.
The purchase price of $21.2m is to be paid cash and will be funded out of Lassonde's working capital. Closing of the transaction is expected to occur in May 2013.
Lassonde Industries chairman and CEO Pierre-Paul Lassonde said that the company's investment in CPC in 2011 was made in accordance with our business and strategic plan.
"This additional investment in CPC confirms our confidence in the success of this plan and in our continued partnering with CPC's lead executive," Lassonde added.
Lassonde noted that this transaction extinguishes financial liabilities associated with the purchased shares, accounted for as retractable financial instruments. As a result, Lassonde expects to recognize a gain, net of related costs, totalling approximately $0.8m.
Lassonde's equity interest in CPC will be increased from 70.7% to 84.0%; of the remaining 16.0%, 6% is held by Clement David Pappas and 10% by members of the Lassonde family.
Lassonde has also agreed to guarantee a minimum price upon exercise of the existing put and call rights provided in the CPC shareholders agreement in respect of the shares held by Clement David Pappas .
Lassonde Industries is a North American leader in the production of a wide range of fruit and vegetable juices and drinks marketed under brands such as Everfresh, Fairlee, Flavür, Fruité, Graves, Oasis and Rougemont. It also produces specialty food products under brands such as Antico and Canton.