Blue Goose Capital Corp., one of Canada’s vertically integrated producers and distributors of organic and natural beef, chicken, and fish with over 45,000 acres of farmland in British Columbia, announced that it has secured a strategic investment of $20 million from Dundee Corp. and Toronto-based venture capital group, Serruya Private Equity (SPE) Inc.
As part of the deal, SPE will be given a seat on the Blue Good Board of Directors.
“We are excited about the opportunity to partner with Blue Goose,” said Simon Serruya, Partner, SPE. “Our investment and involvement at the board level allows us to help Blue Goose continue to build on its position as a leader in the Canadian organic and natural food industry.”
SPE owns a portfolio of some of the top global food brands including Pinkberry, Yogen Fruz, and Swensen’s. Founders of the Yogen Fruz chain, SPE has grown its Coolbrands Inc. into one of the largest frozen dessert manufacturers in North America and has recently exited Kahala Corp., selling it to MTY Group in May of this year for C$400 million.
“This strategic investment by two very prominent partners provides significant capital to help accelerate our growth strategy,” said Ben Nikolaevsky, President and CEO of Blue Goose. “As a leader in the organic proteins market, which is one of the fastest growing segments of the food industry, we are now in a better position to improve our operations and to be an industry consolidator.”
Blue Goose did not wait long after this statement to begin acting on its plans. On the same day the company announced it agreed to acquire Tender Choice Foods, an Ontario-based processing plant focused on processing, packaging, and distributing whole eviscerated turkeys and chickens with exports markets in the United States, Russia, South Africa, Hong Kong and China.
The company states that the investment by Dundee and SPE will partially fund the cost of the acquisition, while Blue Goose has also secured an additional $35 million debt facility from an unnamed Canadian bank for additional funding for the deal, to fund working capital requirements and to provide for future earn out considerations.
The acquisition is being seen by Blue Goose as a means to significantly improve the vertical integration of its poultry business while also positioning the company to capitalize on future margin enhancements.
In 2015, there were 2,690 regulated chicken producers in Canada that produced 1.1 billion kilograms of chicken valued at $2.4 billion, according to data from Agriculture and Agri-Food Canada. Of this total, 61 percent was produced in Quebec and Ontario.
Meanwhile, in the same year, there were 531 regulated turkey producers in Canada that produced 171.4 million kilograms of turkey worth $396 million, contributing 0.7 percent of cash receipts to farming operations. Of this total, 64.3 percent was produced in Quebec and Ontario.
“Blue Goose is pleased to have Tender Choice as part of the Blue Goose group of companies,” said Ben Nikolaevsky, President and CEO of Blue Goose, “With the acquisition of Tender Choice, Blue Goose has acquired a tremendous platform to build on the rapid growth of its poultry operations, and allows us to facilitate our growth in the industry.”
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Lynda Kiernan
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