SAPPORO HOLDINGS LTD.

Sapporo International Inc. to Acquire Frozen Fruit Juice Business with Toyota Tsusho Group

Expanding its school-meal product line compliant with USDA nutrition standards

Sapporo International Inc., a Sapporo Group company, and Toyota Tsusho America Inc. (TAI), a Toyota Tsusho Group company, have decided to acquire the frozen fruit juice business of The Ridgefield's Brand Corporation, Inc. (RBC), a commercial frozen fruit juice manufacturer, through their jointly owned US fruit-juice beverage manufacturer, Country Pure Foods, Inc. (CPF).

The Sapporo Group plans to strategically invest in its international business's sustained growth and pursue continued expansion of its North American soft drinks business.

  1. Agreement

    On May 27, 2016 (JST), Sapporo International subsidiary CPF entered into an agreement with RBC to acquire RBC's frozen fruit juice business for the equivalent of approximately ¥1.5 billion. The acquisition is to be 51% funded by Sapporo International and 49% funded by TAI.

  2. Rationale behind Agreement

    The Sapporo Group is expediting its growth strategy as a manufacturer of food products and endeavoring to achieve its 2016 financial targets through M&A and Group synergies pursuant to its Sapporo Group Management Plan 2015-16 formulated in February 2015.

    As part of this plan, Sapporo International has designated North America, its home base, and the rapidly growing non-Japan Asia region as its highest-priority markets in the beer business. In North America, Sapporo International has been amassing know-how and experience in the soft drinks business through its acquisitions of Silver Springs Citrus, Inc. (SSC), and CPF in 2012 and 2015, respectively.

    RBC currently supplies its products, mainly frozen fruit juice products for US school meals, to customers in 28 states throughout the US. The US Department of Agriculture (USDA) has set standards for servings of fruits and vegetables to be consumed by schoolchildren through school meals. The USDA permits up to half of its recommended servings to be provided in the form of juice and frozen 100% fruit juice. RBC possesses proprietary know-how that enables it to manufacture frozen fruit juice products with a smooth, ice-cream-like texture. Its frozen fruit juice products' popularity among schoolchildren has driven rapid growth in sales, which have roughly doubled over the four years through 2015. By acquiring RBC's frozen fruit juice business to gain RBC's know-how and sales territories, CPF aims to expand its share of the school meal market by maximizing synergies with its educational institution business, one of its core businesses.

    (Continued on next page)

  3. About RBC

Name

The Ridgefield's Brand Corporation, Inc.

Location

Montgomery Village, Maryland, USA

Nature of

business

Commercial sales of Smooth-Frozen® 100% Fruit Juice (served mainly in school

and hospital cafeterias)

Production

plant(s)

None

All production is outsourced

Annual sales

Approx. ¥1.4 billion* (FY12/2015)

Year founded

1993

Representative

Thomas G. Kaplan

*Converted to yen at May 27, 2016, exchange rate for $1 is ¥109.83

Sapporo Holdings Limited published this content on 03 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 03 August 2016 08:20:06 UTC.

Original documenthttp://www.sapporoholdings.jp/english/news_release/pdf/16060701.pdf

Public permalinkhttp://www.publicnow.com/view/BB6A4423DEE9B053CC4F3A28FCEA3A71B8C76413