Ms. Nathalie Lassonde reports

LASSONDE INDUSTRIES INC. ANNOUNCES AGREEMENT TO ACQUIRE U.S.-BASED SUMMER GARDEN FOOD MANUFACTURING

Lassonde Industries Inc. has signed an agreement to acquire United States-based Summer Garden Food Manufacturing.

The 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:  Friday, June 21, 2024

Time:  8:30 a.m. ET

Call:  1-844-763-8274 (for North American participants) and 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. A replay of the webcast will remain available until midnight, June 28, 2024.

Lassonde has entered into a definitive agreement, through one of its U.S. subsidiaries, with Thomas Zidian and members of his family, to acquire The Zidian Group, which operates Summer Garden Food Manufacturing, a United States-based manufacturer and distributor of specialty food, for consideration of $235.0-million (U.S.), payable at closing. By way of additional consideration, a further amount of up to $45.0-million (U.S.) may be payable over the next three years, should certain financial targets be achieved and other conditions met.

Located in Boardman, Ohio, and employing approximately 200 people, Summer Garden develops, manufactures and markets a wide range of premium sauces and condiments, including tomato and cream-based pasta sauces, BBQ sauces, dipping sauces, and dressings. Its portfolio consists of approximately 250 products sold through more than 20,000 locations under Gia Russa and Little Italy in the Bronx brands and under the G Hughes brand, a leader in the U.S. sugar-free BBQ sauce segment. Summer Garden also acts as a co-packer for certain brands.

"The acquisition of Summer Garden supports our ambition to become a more diversified North American food and beverage company," said Nathalie Lassonde, chief executive officer and vice-chair of the board of directors of Lassonde. "Growing our specialty food activities is one of Lassonde's key strategic objectives, and we are happy to have found the right company to help us achieve this objective. Our culture and values align with those of Summer Garden, which is also a multigenerational family business, with an entrepreneurial spirit and strong commitment to its employees, customers, consumers and the communities in which it operates. We are looking forward to closing the transaction and welcoming new talented employees to the Lassonde organization."

Transaction details:

• For the 12-month period ended May, 2024, Summer Garden generated sales of $148.0-million (U.S.) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $27.9-million (U.S.).
• The purchase price is $235.0-million (U.S.) 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 $45.0-million (U.S.) 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 $30.0-million (U.S.), 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 EBITDA ratio at closing is expected to be under 2.20 to 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 Vince Timpano, president and chief operating officer, Lassonde. "It marks another important step in the execution of our long-term strategy and moves us closer to achieving our objective of $3-billion in sales with further margin improvement. Through brands that hold growth potential in their categories, Summer Garden expands our core offering in pasta sauces and extends our reach into new adjacencies. We are also integrating high-quality assets into our network, including additional retort capabilities, to position ourselves as the manufacturer of choice for our customers. Finally, with cash flow generation to support future expansion, we view this transaction as the creation of a new growth platform for Lassonde."

"This partnership ensures our legacy will continue to thrive," said Thomas Zidian, president and chief executive officer of Summer Garden. "We are confident it will benefit our customers through enhanced products, and will offer our employees new opportunities for development and advancement. We also believe the values which have guided the Zidian family business from the start will continue to be the guiding principles under the stewardship of Lassonde Industries Inc."

Canaccord Genuity/CG Sawaya Partners served as exclusive financial adviser to Lassonde, and Brown Gibbons Lang & Company served as exclusive financial adviser to The Zidian Group.

About Summer Garden Food Manufacturing

Based in Boardman, Ohio, Summer Garden operates out of a 10-acre campus consisting of a green LEED certified manufacturing facility with research and development and production capabilities, including high-acid and low-acid (retort) manufacturing capabilities. Summer Garden is an owned subsidiary of The Zidian Group, a family-owned manufacturer, marketer and distributor of premium sauces, including BBQ sauces and pasta sauces, as well as dipping sauces, marinades, dressings and other shelf-stable products. The business's owned brands include the leading sugar-free BBQ sauce brand, G Hughes, as well as Gia Russa and Little Italy in the Bronx brands. It is also a recognized and trusted co-packer for growing brands.

About Lassonde Industries Inc.

Lassonde is a leader in the food and beverages industry in North America. The corporation develops, manufactures and markets a wide range of private label and national brand products, including ready-to-drink beverages and fruit-based snacks, as well as frozen juice concentrates. It is also a leading producer of cranberry sauces and specialty food products such as pasta sauces, soups and fondue broths, and sauces. The corporation also produces, imports and markets selected wines from several countries of origin and produces and markets apple cider and cider-based drinks.

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 and major pharmacy chains.
• Food service sales consist of sales to restaurants, hotels, hospitals, schools and wholesalers serving these institutions.

The corporation operates 18 plants located in Canada and the United States, and produces its superior quality products through the expertise of over 2,700 full-time-equivalent employees.

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