SunOpta Secures $85m Investment
10 Oct 2016 --- SunOpta has secured a tie-up with Oaktree Capital Management, which is investing $85m in exchange for taking a stake in the Canadian organic food group.
SunOpta, which specializes in organic GMO-free and speciality foods, finished a strategic review of its business in June this year.
As part of the tie-up, the Canadian food group has added two directors nominated by Oaktree, an investment company, and one from Engaged, its second-biggest shareholder.
Oaktree has invested $85m in the form of exchangeable preferred shares, with the funds going to partly reduce debt.
Oaktree, which has previously invested in food companies like Campofrio Food Group and Diamond Foods, has taken an 11.7 percent share in SunOpta with the option of purchasing an extra 3m SunOpta shares in the next 12 months.
"After concluding a comprehensive review of strategic and financial alternatives, we are excited to have a partner in Oaktree that truly appreciates SunOpta's unique position in the market and the potential value that can be created for all our shareholders through performance improvement and accelerated growth," said Alan Murray, Chairman of the Board of SunOpta.
"Given Oaktree's deep industry knowledge and operational expertize, we believe they are the ideal partner for SunOpta as we seek to strengthen the company's operations in a way that can reduce operational volatility and realize sustainable growth and value creation. We believe this strategic option provides the highest risk adjusted return from the many options available and evaluated by the Board."
"With its strong and diverse portfolio of products and having recently undergone a period of significant investment in the business, we believe SunOpta has a substantial opportunity for growth in the rapidly expanding market for healthy and organic foods," said Matt Wilson, Managing Director and Co-Portfolio Manager of Oaktree.
"SunOpta is a natural fit for Oaktree given our experience in the consumer and food industries, and we see a significant opportunity to provide strategic, operational and financial support that will accelerate the Company's value-enhancing initiatives and position it for long-term success."
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