By David G. Barry
Caisse de dépôt et placement du
Québec (CDPQ), Canada’s second-largest pension fund, is taking part in two
transactions, one recapitalizing a contract development and manufacturing
organization and another involving the purchase of a processor and marketer of
canned and frozen vegetables.
CDPQ, which had assets as of December 31 of 420 billion Canadian dollars (US$328
billion) has been relatively quiet in making private equity investments in
2022. The two new transactions may be a sign that the fund sees now as an
opportune time to invest.
In the first deal, it is working with ArchiMed, a healthcare-focused
private equity firm, to recapitalize Corealis Pharma. Terms were not
disclosed. The transaction is aimed at expanding the drug development services
that Corealis offers.
Founded in 2005 and based in Laval, Quebec, Corealis focuses on formulating and
manufacturing solid dosage oral pharmaceuticals – tablets, capsules and
granules – during preclinical and clinical pre-commercialization trials.
CDPQ’s second deal involves it teaming up with another Canadian fund, Fonds de
solidarité FTQ, to acquire a 65% stake in Bonduelle Americas Long Life
(BALL) from The Bonduelle Group. BALL’s enterprise value is CA$850 million (US$663
million). This would put the purchase price at CA$552.5 million (US$431
million).
BALL processes and markets its canned and frozen vegetables in the United
States and Canada through private labels, third-party brands and its own brands,
Arctic Gardens and Del Monte. It generated revenue of $735 million in
2020-2021. Bonduelle decided to sell BALL after a strategic review last year.
In a statement, Kim Thomassin, executive vice president and head of
Quebec at CDPQ, said that the fund is “especially proud to become a shareholder
of one of the principal players in the North American food industry.” She said
that alongside FTQ, CDPQ will back BALL’s “ambitious expansion plan” to become
a Canadian leader and further develop the U.S. market.
CDPQ’s private equity investments in 2022 include taking part in a $325 million
financing earlier this year of eSentire, Inc., a security company. The
financing valued eSentire at more than $1 billion. Warburg Pincus is the
company’s majority shareholder.
Private equity is CDPQ’s second-largest investment segment, valued at CA$82.5
billion ($64.36 billion) at the end of 2021. That was just behind credit, which
was valued at CA$83.8 billion ($65.37 billion).
CDPQ generated $47.5 billion, or a 13.5% return in 2021. Equities, which
private equity is a part of, had a 24.6% return in 2021.