A consortium of Quebec investment and pension fund managers and banks has bought $470 million of preferred units in Agropur Co-operative, Canada’s largest dairy co-op.
The transaction supports the co-operative’s growth strategy and finances its recently announced acquisitions, including the dairy processing assets of U.S.-based Davisco and Canada’s Sobeys and Northumberland, a news release said.
These deals make Agropur one of the largest North American dairy product processors.
The transactions are expected to increase Agropur sales to more than $5.8 billion on an annualized basis. Milk processing should climb to 5.3 billion litres a year in 41 plants in North America.
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Agropur has 3,473 dairy producer members and 8,000 employees.
“Quebec’s high-performing businesses achieve economic growth, notably when they expand into new markets, and the investment in Agropur Cooperative is ideally aligned with this approach,” said Marc Cormier, executive vice-president for fixed income with La Caisse de dépôt et placement du Québec, who piloted the investment for La Caisse.
Agropur president Serge Riendeau said increasing competition requires the co-op to become more strategic.
“To help support Agropur’s growth and sustainability, we have placed our confidence in our highly regarded financial partners, who are capable of supporting our development while keeping Agropur’s control and ownership in the hands of its members.”
The investments were as follows:
- La Caisse de dépôt et placement du Québec — $150 million. Based on certain conditions, La Caisse’s stake could reach $300 million at the next issuance of preferred units.
- National Bank and the Fonds de solidarité FTQ — $75 million each.
- Investissement Québec — $65 million.
- Capital régional et coopératif Desjardins — $55 million.
- Fondaction CSN — $50 million.
