Rogers Sugar Inc. (TSX: RSI) has agreed to acquire L.B. Maple Treat Corporation (LBMT), one of the world’s largest branded and private label maple syrup bottling and distribution companies, from private equity firm Champlain Financial Corporation Inc. for $160.3 million.
Champlain Financial, together with Daniel Cousineau and investment partners, Torsby Overseas Ltd., Daniel Gauthier, Christian Pouliot, and Fondaction, bought L.B. Maple Treat from Bedford Capital in February 2016.
Subject to customary closing conditions including regulatory approval, the transaction is expected to occur in August 2017.
Rogers Sugar intends to finance the acquisition with a $110 million bought deal of subscription receipts and extendible convertible unsecured subordinated debentures and increasing of its existing banking facility by $75 million to $275 million.
Founded in 1946, L.B. Maple Treat Corporation has two bottling plants in Québec and one located in Vermont. The business is supported by distribution centers in Eastern and Western Canada, the U.S. and Australia.
For the period ended March 31, 2017, LBMT’s products were sold in the U.S. (~50%), Canada (~15%) and internationally (~35%). For the same period, private label and branded products accounted for approximately 85% and 15% of total sales, respectively.
LBMT represents an amalgamation of four independent companies, three of which were acquired over the past year. For the trailing twelve month period ended March 31, 2017, LBMT generated $154 million in revenue and $18.41 million in Adjusted Pro Forma EBITDA, which includes approximately $2.9 million of recent customer and operational gains.
“This transaction is significant for Rogers Sugar. It adds product reach in a natural sweetener category with attractive growth, it provides strong stand-alone economics, it will improve Rogers Sugar free cash flow, it should be quickly accretive and is expected to add shareholder value. The management teams of Rogers, LBMT and Champlain have worked very effectively and cooperatively to advance this transaction,” said Dallas Ross, Chair of the Board of Rogers and Lantic Inc.
“This sizable and strategic transaction is a game changer for Rogers Sugar. The acquisition of LBMT will allow us to diversify into the large and growing market of maple syrup, a natural sweetener, with one of the leaders in the industry. This new platform will provide us with opportunities to grow organically, leverage sales and operational gains, and look at other acquisitions. The financing structure put in place permits us to maintain a solid balance sheet,” said John Holliday, President & CEO of Rogers Sugar and Lantic Inc.
“Rogers Sugar is a perfect fit with L.B. Maple Treat because our organizations already share a number of business partners, and we intend to enhance and expand these essential relationships. As a result of our business combination, our customers and partners will now have access to an extraordinary portfolio of products, distribution and production capabilities across North America, Europe and Asia. Our group remains focused on its vision of offering an unparalleled level of reliability, flexibility, and leadership in the maple syrup industry,” said Daniel Cousineau, President of LBMT.
photo credit: L.B. Maple Treat