Ms. Nathalie Lassonde reports

LASSONDE INDUSTRIES INC. COMPLETES THE ACQUISITION OF SUMMER GARDEN FOOD MANUFACTURING

Lassonde Industries Inc. has completed, through a 90-per-cent-owned U.S. subsidiary, the acquisition of The Zidian Group, which operates Summer Garden Food Manufacturing. 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 the 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. For the 12-month period ending in May, 2024, Summer Garden generated sales of approximately $148.0-million (U.S.) and adjusted earnings before interest, taxes, depreciation and amortization of approximately $27.9-million (U.S.).

"We are delighted to welcome Summer Garden's employees and management to the Lassonde organization, and we look forward to leveraging our combined expertise," said Nathalie Lassonde, chief executive officer and vice-chair of the board of directors of Lassonde. "This acquisition marks an important step in the execution of our strategy by significantly expanding the scope of our North American specialty food business and creating a new growth platform for Lassonde."

"This acquisition positions Lassonde as the specialty food manufacturer of choice for our customers as we integrate high-quality assets into our network, including additional retort capabilities, to further leverage our key capabilities," added Vince Timpano, president and chief operating officer, Lassonde. "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. Its product portfolio and capabilities will deliver an immediate path to growth at attractive and accretive margins."

The acquisition was for a cash consideration of $237.2-million (U.S.). This amount reflects $2.2-million (U.S.) in preliminary adjustments related to working capital and could be subject to additional adjustments related to working capital and other items once the final value is established. Moreover, a contingent consideration 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. Consistent with the ownership structure of the corporation's U.S. subsidiaries in place since 2011, the corporation owns a 90-per-cent equity interest in Summer Garden while 3346625 Canada Inc., an entity controlled by Pierre-Paul Lassonde, chairman of the corporation's board of directors, owns the remaining 10 per cent.

At the close of the acquisition, an amount of $241.0-million (U.S.) was paid to settle the Summer Garden acquisition cost and certain related charges. It was financed as follows: (i) $224.5-million (U.S.) from the Canadian revolving operating credit facility; (ii) $6.0-million (U.S.) from the corporation's cash and cash equivalents; and (iii) $10.5-million (U.S.) in equity from 3346625 Canada. The acquisition-related costs should total approximately $6.3-million (U.S.).

The corporation will recognize this business combination using the acquisition method in accordance with the provisions of international financial reporting standard 3 (Business Combinations). Therefore, the interim consolidated financial statements for the third quarter of 2024 will include the results of Summer Garden from Aug. 8, 2024, certain acquisition-related transaction costs not already recorded and the effect of the purchase price allocation exercise.

For further details regarding Lassonde, Summer Garden and the acquisition, please refer to the corporation's management's discussion and analysis dated Aug. 8, 2024.

About Lassonde Industries Inc.

Lassonde is a leader in the food and beverage 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, BBQ sauces, condiments, 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 19 plants located in Canada and the United States, and produces its superior-quality products through the expertise of over 2,900 full-time equivalent employees.

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