Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/52834
In the last year, notable mergers and acquisitions in the food indus- try in Canada have included Canadian companies selling to foreign buyers. In December 2010, Liberté Inc. of Quebec was purchased by Paris-based Yoplait SAS, the second-largest brand of fresh dairy products in the world. Founded in 1936, Liberté offers more than 100 products, including various types of yogurt, kefir, cheese, sour cream, and tofu distributed in Canada and the northeastern United States. The com- pany posted $175 million in sales in 2009, and had been owned by the U.S- based Swander Pace Capital private equity firm since 2003. "It ticked a lot of boxes that people were looking at in the categories of diet foods, natural foods," says Valerie Scott, principal with Swander Pace Capital. Knibutat disagrees that there are more acquisitions of Canadian compa- nies happening than foreign buys being made. "There's a notion of hollowing out whenever someone buys what is thought to be a gem, but when you consider that since 2008 the ratio of buy/sells into the U.S. has been in favour of Canadian companies buying more companies than U.S. companies have bought as it relates to volume and we're also seeing the value of Canadian deals exceeding that of the U.S.," he says. Across the board, he says Canadian companies tend to acquire abroad more as opposed to other countries' compa- nies coming here to buy, and there have been a number of large transactions recently in the food industry to prove that. For example, in November 2011 Lunenburg, N.S.-based High Liner Foods Inc. bought Icelandic Group's U.S. and Asian operations for US$230.6 million, making it the biggest supplier of frozen seafood to North American restaurants, hospitals, and schools. It is also acquiring a plant in China and companies that buy fish from other Asian countries. Another example is Montreal-based cheese manufacturer Saputo Inc., which also made a large acquisition in early 2011 of DCI Cheese Co. of Richfield, Wis. for US$270.5 million. Saputo sells cheese products to more than 40 countries around the world. "We certainly have a small share of the overall capital global market but we have large pension funds looking to do more in the area of direct investing. They are starting to go abroad more and do more acquisitions and deals," says Knibutat, who notes there are some large Canadian players such as McCain Foods Ltd., who are not just doing direct acquisitions either — one strategy is to follow the customer. "So for McCain — one of its big customers is McDonald's for their french fries. They've been in places like Russia and China as their customers have gone into those emerg- ing markets as well." Even during lean times, the food industry in Canada saw five-per-cent growth last year. Scott says over the last few years, she has seen a lot of resil- ience within Canadian companies even in What if you could combine experienced insurance litigators with powerful claims management software that lets you manage every aspect of your litigation portfolio online... all for a xed fee? It's possible. Call us. We'll show you how. Louis Frapporti 905.540.3262 louis.frapporti@gowlings.com Ralph D'Angelo 905.540.7116 ralph.dangelo@gowlings.com www.gowlings.com/services/xclaim redening the lawyer- client relationship 24 • FEBRUARY 2012 Untitled-3 1 INHOUSE 12-01-03 12:40 PM