From the last posting, I said
- Lassonde has repaid $72M of debt in 2017 and $83M in 2016. They reduced its debt from $380M in 2014 to $168M in 2017.
- That means, the time is almost ripe for another acquisition that will boost almost all metrics of the company.
Lassonde just announced an acquisition of Old Orchard Brands
How did I know?
I did not… I just knew that historically, Lassonde always uses its credit facilities to make acquisitions then aggressively pays down the debt while integrating the acquired companies. Then they rinse and repeat. Their debt is almost 1.2 times cash flow or 1.5 times free cash flow so I just thought they would pull the plug soon.
Summary of the deal
- Annual sale= US$103.3M
- Adjusted EBITDA= US$15.8M
- Purchase price= $US 146M (Only 1.4 times sale and 9.2 times EBITDA. Great value)
- Further strengthen Lassonde’s presence in US
- Add additional production line for frozen concentrated products
- Another family oriented company that will fit well with current Lassonde structure
Nothing to complain about this deal. What a beast…
Today the stock ran up by 6% at very light volume (less than 3,000 shares traded which typically isn’t a good news when it is traded up) but the fact that you are reading this article and interested in or owning Lassonde means you are very long term based, probably a private investor who cares about fundamentals of the company rather than short term price fluctuations.
For those who want to check out Old Orchard, click below.
TSX’s most sleepy company buys another boring private company in the most boring fruit juice industry.
but for me, Lassonde is my sleeping beauty that keeps me younger and richer day after day.
For those who wants to read more about Lassonde, here you go.