Stephen Bronfman’s private-equity firm Claridge Inc. is taking a bigger bite into food and beverage deals, partnering with the Quebec government’s investment arm and the Fonds de solidarité FTQ on a new financial alliance to support budding food processing companies in the province.
The new investment vehicle has a target size of nearly $100-million and will back Quebec-based food processors that show significant growth potential, the three partners said in a statement Tuesday. The trio said they’re prepared to invest many times their initial commitment to support pivotal projects.
“There’s a lot of very interesting food businesses in Quebec but some of them have challenges as they’re trying to expand beyond our borders,” said Ludovic Dumas, vice-president of direct investments at Claridge, who will lead the investment platform’s management team together with food and beverage industry veteran Bob Leonidas. “The idea is essentially to identify a few companies that we’ll invest in and build for the long term.”
The partnership between Investissement Québec, the FTQ labour fund and Claridge feeds into one of the Quebec government’s own stated aims, namely to bolster the resiliency of the provincial economy in areas such as health care and food. Premier François Legault has said Quebec wants to be able to produce more medical equipment, medication and supplies locally and “think about the entire food chain to ensure that if there were another crisis, that we’d be autonomous.”
For Claridge, the pact brings the financial firepower of two institutional investors to its own deal-making, allowing it to “do more” with a bigger pool of capital, according to Mr. Dumas. It builds on the family office’s own focus on the food space. Over the past 20 years, Claridge has invested more than $400-million in a dozen food processing companies across Canada and the United States.
One of its longest holdings was Plats du Chef, a Montreal-based maker of frozen snacks, soups and meals. For 15 years, Claridge helped Plats founders Michel and Monique Lachapelle expand through acquisitions and develop products for clients before the business was sold to C.H. Guenther & Son Inc. in 2017 for an undisclosed amount.
Today, Claridge holds three major food investments: Vancouver-based 49th Parallel Coffee Roasters; Los Angeles-based Califia Farms, a plant-based beverage company; and Montreal-based Champlain Seafood, which owns several lobster and crab processors. Past holdings include SunOpta, a specialty food supplier; Glutino, the continent’s biggest gluten-free-food company; and La Terra Fina, a maker of dips and quiches.
“You have some investors that have done deals in the food industry but we have experience actually planning, managing very large organizations,” Mr. Dumas said, noting that Mr. Leonidas is the former country head for industry giant Nestlé SA in both Canada and the United States. “So we’re trying to put this expertise for the benefit of Quebec businesses.”
Food and drink is in the Bronfman bones. The family built Seagram Co. Ltd. into one of the world’s biggest liquor empires in the 1990s before the company imploded after a series of questionable business decisions. It was an outcome Stephen Bronfman’s father, Charles, would later sum up as “a family tragedy.”
The new financial alliance will take majority or minority positions in innovative companies with a goal of turning them into North American leaders, the partners said. The trio said they share a common long-term investing vision based on a “practical, patient and growth-oriented” approach.
“We recognize the strategic contribution of this industry to Quebec’s economic development and that of its regions, and its essential contribution to our food autonomy,” Investissement Québec chief executive officer Guy LeBlanc said in a statement. “We’re well aware of the challenges industry players are facing and will continue to work alongside partners in the ecosystem to support them and contribute to their growth.”
The Legault government widened Investissement Québec’s mandate through new legislation passed in 2019 that saw the organization double its staff to 1,000 people and boost its capital by $1-billion to $5-billion. The government also gave the investor a $1-billion growth fund to stoke the development of local companies and protect corporate head offices.
Mr. Bronfman, whose father was the majority owner of the Montreal Expos for 22 years, had been working with partners to bring professional baseball back to the city. The plan fell apart last week when Major League Baseball’s executive council rejected a proposal by the principal owner of the Tampa Bay Rays to split his team’s 81-game home schedule between Florida and Montreal.
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