Information on the Target

Founded in 1918, Groupe Courchesne Larose has become a cornerstone of the Canadian fresh produce industry over the past century. Headquartered in Montreal's Hochelaga-Maisonneuve district, this family-owned business, led by the Routhier family, now employs over 600 individuals and encompasses several strategic subsidiaries, including Les Aliments Bercy, Krōps Imports, Emballages Marcan, Transport Dynapro, and Veg-Pak Produce. The group stands out as a leader in Eastern Canada for the importation and distribution of fresh produce, boasting an efficient distribution network and logistics services that cater to clients in Quebec, Ontario, and the Maritime provinces while offering customized processing and packaging solutions.

Industry Overview in Canada

The Canadian fresh produce industry benefits from a stable demand driven by health and wellness trends among consumers. As Canadians increasingly seek out fresh fruits and vegetables, distribution networks have evolved to adapt to changing market dynamics, prioritizing efficiency and sustainability. Furthermore, government initiatives aimed at promoting local agricultural products have strengthened the market, fostering greater connectivity between consumers and producers.

Market trends show a growing acceptance for local sourcing and environmental sustainability, aligning well with the operational strategies of companies like Groupe Courchesne Larose. The establishment of robust supply chains ensures high-quality product availability while upholding cost efficiencies, thus benefiting both suppliers and consumers.

Alongside these positive developments, the sector faces ongoing challenges including fluctuating supply chain costs and increasing competition from international producers. Nevertheless, the demand for fresh produce remains a reliable growth driver in the industry, making it a compelling area for investment.

The Rationale Behind the Deal

In December 2022, Sagard Placements Privés Canada, in partnership with Roynat and Fondaction, announced an investment in Courchesne Larose. This investment was crucial for Courchesne Larose as it sought to implement its ambitious strategic plan for 2019-2024, which is essential for ensuring the company's sustainability and future growth. Sagard's financial backing strengthens the existing capital structure and aligns well with the long-standing heritage of the Routhier family's involvement, establishing a integral partnership between family tradition and financial dynamism.

Information About the Investor

Sagard Placements Privés Canada, launched in 2021, is a middle-market investment fund operating under the larger multi-strategy alternative asset management firm Sagard, which is associated with Power Corporation of Canada. The firm is dedicated to supporting Canadian small and medium-sized enterprises by providing flexible equity capital and leveraging its extensive global network of expertise and partnerships. With a structured methodology and rich experience, Sagard aims to identify strategic opportunities that facilitate growth and operational improvement for its portfolio companies.

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In evaluating the investment in Courchesne Larose, it is evident that this strategic partnership could lead to significant returns and growth for both parties involved. Sagard's entry not only ensures adequate financial support for expanding Courchesne Larose's operational footprint but also aligns with positive industry trends supporting the demand for fresh produce.

The potential for Courchesne Larose to successfully implement its expansion plan across Canada is promising, especially given its established base in Quebec and effective logistics capabilities. The recent acquisition of Veg-Pak Produce exemplifies the potential for strategic growth in new markets.

Moreover, the partnership allows Courchesne Larose to maintain its family-oriented culture while evolving to meet the challenges and opportunities in the competitive landscape. Maintaining such an identity could be a strong competitive advantage.

Overall, this investment signifies a robust opportunity for both Sagard and Courchesne Larose, supporting long-term value creation and establishing a model for sustainable growth in the Canadian fresh produce market.

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