Carrière Foods sold to French firm
BONDUELLE TAKES UP REMAINING STAKE Words words words words words words
Canned and frozen vegetables in Canada will take on a decidedly French flavour next month when the sale of this country’s leading processor in the field is finalized.
A year after buying a 23-percent share of Carrière Foods, a Quebec company with several popular household brands in Quebec, Ontario and the Maritimes, French food giant Bonduelle recently acquired the rest of the privately owned company.
“It’s a sad day for me but a happy one, I think, for the Canadian food and agricultural industries,” said Marcel Ostiguy, president, chief executive officer and one of eight siblings who owned shares in a once-tiny family run firm that now boasts $350 million in annual sales.
“I think (Carrière Foods) is a better manager, but Bonduelle is much better in the development of product and marketing,” Ostiguy said. “I think the two companies together will result in great synergy.”
He said the deal will be completed in July, but he would not disclose the price or whether it was an all-cash transaction.
However, Ostiguy noted that Bonduelle’s shares have nearly doubled in the past year taking them to more than 90 euros.
Bonduelle is the world’s largest vegetable processor with about $2 billion in annual sales – but none in Canada.
With the acquisition of Carrière, it will overnight become the country’s largest.
Carrière has seven canning and frozen-vegetable facilities – four in Quebec and three in Ontario – with 750 regular full-time employees and up to 1,200 seasonal employees.
Named one of Canada’s 50 best-managed Companies in six of the past seven years, Carrière grows 98 per cent of the 335,000 tons of vegetables it processes on 100,000 acres of farmland – 20,000 of which it owns – in Quebec and Ontario.
In addition to selling its best-known retail brand names – including Arctic Gardens, Avon, Daizy Farm, Festino, Graves, Paula, Stokely, and Sunny Farm – through all the major grocery-store chains in eastern Canada, the company provides canned and frozen vegetables to the food service industries through a distribution network that stretches across North America and into the Caribbean.
Ostiguy, an accountant who studied at Montreal’s École des Hautes Études Commerciales with his brother Claude, bought their father’s small canning business in 1973 for $150,000.
Ostiguy said the deal with Bonduelle had its genesis in 2004, when several of his five sisters and two brothers expressed an interest in selling their shares in the company, as did shareholder Mouvement Desjardins. Together the siblings and the bank owned about 25 per cent of the company.
Ostiguy owned about 33 per cent – as did another financial partner, the Société générale de financement.
“I didn’t want to take the company public or sell it to a trust or money managers,” he said yesterday from the company’s head office in St. Dénis sur Richelieu, a few kilometres from his hometown of St. Césare, where his father’s canning facility was located. “I wanted to find a partner who knew the business like I do.”
After failing to persuade a large American company to buy into his concept of limited ownership, he sent a Christmas card to Christophe Bonduelle, president of a family firm founded in northern France 150 years ago. Ostiguy had never met Bonduelle.
“I told him that, if he ever had a spare hour in his life, I’d like to meet and talk about something.” Ostiguy recalled.
Bonduelle responded and the two men met in Dorval in March 2005. According to Ostiguy, the two men quickly discovered they were like two peas in a pod.
“We both told each other that we’d never met anybody who knew as much as the other did about the vegetable processing industry,” Ostiguy said.
Although Bonduelle told him his company had focused its expansion plans on Russia and eastern Europe – not North America – Ostiguy said a series of meetings, offers and counter-offers carried on over several months. Finally, Bonduelle agreed to purchase 23 per cent of Carrière Foods a year ago.
A month later – in July 2006 – the French food giant informed Ostiguy that it was invoking its contractual right to buy the rest of the company.
However, as a veteran of acquisitions in the field, he said the sales price of vegetable-processing companies is normally well below their annual sales figures.