Clement Pappas to launch $280 million credit facility on July 20

By Sara Rosenberg

New York, July 13 - Clement Pappas and Co. Inc. is scheduled to hold a bank meeting on July 20 to launch a proposed $280 million credit facility, according to a market source.

Jefferies & Co. and BMO Capital Markets Corp. are the lead banks on the deal.

The facility consists of a $50 million five-year ABL revolver and a $230 million six-year term loan B, the source said, adding that price talk is not yet available.

Proceeds will be used to help fund the buyout of the company by Lassonde Industries Inc. for a total cash consideration of $390 million payable at closing, subject to adjustments for working capital and other items.

Lassonde Industries previously said that it expects to draw $253 million under the credit facility and invest about $106 million, and the balance of $44 million will be provided by members of the Pappas and Lassonde families.

Closing is expected in August, at which time Lassonde Industries will have a beneficial ownership of 71% of Clement Pappas, members of the Pappas family will own 19% and members of the Lassonde family will own 10%.

The transaction is subject to customary terms and conditions, including a breakup fee and receipt of regulatory approvals.

Pro forma for the transaction, senior leverage is around 4.25 times.

Clement Pappas is a Carneys Point, N.J.-based producer of store brand ready-to-drink fruit juices, drinks and sauces. Lassonde Industries is a Quebec-based developer, manufacturer and marketer of fruit and vegetable juices and drinks as well as specialty food products.

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