Power Sustainable Lios, the agri-food investment arm of Montreal-based Power Sustainable, has acquired majority ownership of Richmond, B.C.-based Fine Choice Foods Ltd. from U.S. private-equity firm Swander Pace Capital, ending eight years of American ownership of the company behind the SUMM! brand of refrigerated Asian-inspired appetizers.
The deal, announced Thursday, sees Farm Credit Canada and Toronto-based Bonnefield Financial Inc. take minority stakes through Bonnefield’s agribusiness fund. Fine Choice’s existing management team will remain in place. Financial terms of the transaction were not disclosed, though Power Sustainable Lios typically targets companies with annual sales between $150-million and $250-million and EBITDA of $15-million to $25-million.
Part of a Larger Push Into Canadian Companies
The acquisition is the first deal under a plan Power Sustainable announced in September to direct at least $10-billion into Canadian companies and infrastructure over five years. Power Sustainable is an asset-management arm of Power Corp. of Canada, led by the Desmarais family.
This marks the second consecutive deal in which Power Sustainable Lios has bought a Canadian company from a U.S. private-equity seller. In January, it acquired Ontario-based Crofter’s Organic, described as North America’s largest supplier of organic jams, jellies and spreads. Fine Choice is the fifth deal made through Power Sustainable Lios’s $285-million first fund, which also owns Food Cycle Science Corp., a maker of food-waste recycling appliances.
“We’ve been able to bring ownership back to Canada, and that’s not the mandate, but it’s a moment of pride,” managing partner Jonathan Belair said.
From a Vancouver Storefront to National Shelves
The SUMM! brand began as a small, family-run storefront in Vancouver selling frozen dim sum before growing into a manufacturer of refrigerated appetizers such as spring rolls, gyoza dumplings and bao buns, now sold in national grocery chains in Canada and the U.S. as well as club stores including Costco. Swander Pace, which owned Fine Choice since 2018, led the company through what it describes as an eight-year program to professionalize the business. Power Sustainable Lios said it plans to expand Fine Choice’s product range and push further into U.S. markets.
Power Sustainable Lios partner Craig Hanna said Fine Choice’s segment of refrigerated, ready-made foods is growing because such products are seen as fresher, healthier and more convenient than frozen alternatives. He noted rising interest among North American consumers in trying new flavours and ethnic foods, along with resilient demand even as inflation squeezes household budgets. “Consumers are pressed for dollars, but they’re also pressed for time,” he said. He added that Fine Choice’s established supply chain, its Vancouver-area manufacturing facilities and its food-safety protocols helped it stand out as an acquisition target.
Food Sector Draws Private-Equity Interest
According to the companies, Canada’s food and beverage manufacturing industry contributes about $35-billion to the country’s gross domestic product, more than twice the size of the auto sector. The sector includes a large number of family-owned businesses that are reaching a point where they require capital and professional management to continue growing, making them attractive at a time when high interest rates and economic uncertainty have contributed to a glut of private-equity deals generally.
“I’m not sure if everybody realizes how rich the opportunity set is in Canada,” Hanna said.
Last year, the private-equity arm of Fengate Asset Management acquired Toronto-based healthy-snack maker Sweets From the Earth, taking control of the family-led business while keeping its founders involved.
Fine Choice Foods Deal: Key Figures
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