Zidian Group Sells Summer Garden Food for $235 Million

BOARDMAN, Ohio – Summer Garden Food Manufacturing, owned and operated by entrepreneur Thomas Zidian and his family, has been sold to a subsidiary of a Canadian company for $235 million.

The transaction was announced Friday by Lassonde Industries Inc. of Rougemont, Quebec. The $235 million is payable in cash at closing. It is subject to regulatory clearance and certain conditions specified in the acquisition agreement and is expected to close within 30 to 45 days.

Summer Garden Food is a subsidiary of The Zidian Group, the family-owned manufacturer, marketer and distributor of premium barbecue and pasta sauces, as well as dipping sauces, marinades, dressings and other shelf-stable products. It operates a 10-acre campus at 500 McClurg Road that consists of a Green LEED certified manufacturing facility with research and development and production capabilities.

Among the 250 products Summer Garden turns out at the plant – and sells through more than 20,000 locations – are the leading sugar-free barbecue sauce brand, G Hughes, as well as the Gia Russa and Little Italy in the Bronx brands. The company had sales of $148 million during the 12-month period ended May 31, according to information provided to investors in Lassonde Industries.

“This partnership ensures our legacy will continue to thrive,” Thomas Zidian, president and CEO of Summer Garden, said in a statement. “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.”

Lassonde develops, manufactures and markets ready-to-drink beverages, fruit-based snacks and frozen juice concentrates. It is also a producer of cranberry sauces and specialty food products such as pasta sauces, soups and fondue broths and sauces. It also produces, imports and markets selected wines from several countries of origin and produces and markets apple cider and cider-based drinks.

The company operates 18 plants in Canada and the United States and employs 2,700 full-time equivalent employees.

“The acquisition of Summer Garden supports our ambition to become a more diversified North American food and beverage company,” Nathalie Lassonde, CEO and vice chair of Lassonde Industries Inc., said in a statement. “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 multi-generational 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 include:

• For the 12-month period ending in May 2024, Summer Garden generated sales of $148 million and adjusted EBITDA of approximately $27.9 million.
• An amount of up to $45 million may be payable in various installments 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 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 EBITDA ratio at closing is expected to be under 2.20:1, leaving sufficient headroom to continue the deployment of the corporation’s strategy.

“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 ofLassonde Industries Inc. “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.”

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

Pictured at top: Thomas Zidian. Image: Summer Garden Food website.

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