SPARTA — A family-owned West Michigan fruit juice and beverage producer has agreed to sell to a Quebec-based beverage company in a deal valued at $146 million.
Old Orchard Brands LLC of Sparta agreed last month to a deal with Rougemont, Quebec-based Lassonde Industries Inc. (TSX: LAS.A), according to a statement.
The value of the cash deal could increase another $10 million if the company meets certain financial targets over the next two years.
Old Orchard was founded in 1985 by Mark Saur, who currently serves as its president and CEO. The company manufactures shelf-stable fruit juice products and frozen juice concentrates and employs about 100 people.
The operation generated sales of $103.3 million last year. Old Orchard’s adjusted earnings before interest, taxes, depreciation, and amortization were $15.8 million for the 2017 fiscal year, according to a statement.
Saur described Lassonde as the “perfect match” to take Old Orchard into the future.
“It’s the perfect combination of two companies with a long history of success in the juice industry,” Saur said in a statement on the deal with Lassonde. “I am proud of what we have built over the past 30 years and could not think of a better owner of our brand and business than Lassonde. I have always admired this family-oriented business, their value system and the quality of their product offering.”
New York City-based Sawaya Partners LLC served as the financial adviser to Old Orchard in the deal.
Lassonde also plans to acquire the property on 12 Mile Road and M-37 in Sparta that houses Old Orchard’s manufacturing operations for $4 million, pending regulatory conditions. If the purchase does not go through, Lassonde said it intends to execute a long-term lease for the property.
The transaction is expected to close this month, pending a deal on the real estate and other regulatory approvals.
Lassonde Industries makes a range of ready-to-drink fruit and vegetable juices and drinks under brands including Apple & Eve, Everfresh, Fairlee, Fruité, Graves, Oasis and Rougemont. The company employs 2,100 people at 14 plants across the U.S. and Canada.
The acquisition expands its Midwest manufacturing footprint, adds to its presence in the U.S. juice market and offers production capabilities for frozen concentrated products. The Old Orchard acquisition would give the company its first plant in Michigan.
“Adding the Old Orchard brand to our product portfolio will further strengthen our presence in the U.S. national brands sector,” Lassonde Chairman and CEO Pierre-Paul Lassonde said in a statement. “This transaction fits well within our sustained growth strategy and improves our overall position in the United States.”
Executives at Lassonde believe Old Orchard is well-positioned for continued growth and offers broad and consumer-relevant products.
“The Old Orchard brand has a solid reputation in the United States and enjoys good brand loyalty in the Midwest,” said a Lassonde spokesperson.