Canada Pension Plan invests CA$200mn in Premium Brands

By gor goz

Premium Brands Holdings Corporation, the Richmond, British Columbia based food manufacturing and distribution company, has announced it is to receive an investment of approximately CA$200mn (US$149.3mn) from the Canada Pension Plan Investment Board (CPPIB).

CPPIB will purchase 2.631mn shares at $76.02 each, resulting in a stake of approximately 7.1% in Premium Brands.

"Premium Brands' strong track record of value creation, combined with its opportunities to expand its portfolio in Canada and the U.S., make this a compelling investment for CPPIB," said Deborah Orida, Senior Managing Director & Global Head of Active Equities, CPPIB. "This investment builds on our Relationship Investments group's strategy to provide strategic, long-term capital to leading public companies where we can help create greater value through ongoing partnership.”

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In return, Premium Brands say that they will provide CPPIB with certain board nomination rights reflecting its investment, as well as the right to participate in any future offerings of the company’s securities.

George Paleologou, President and CEO of Premium Brands, said: "We are very pleased to be entering into this long-term partnership with CPPIB as we embark on the next stage of our growth strategy. As we have expanded our footprint across North America our pipeline of acquisition and organic growth opportunities has scaled dramatically. By partnering with CPPIB not only do we better position ourselves to execute on these opportunities but we also secure a long term focused shareholder who shares our values and vision for the future. Furthermore, we gain access to the insights of a leading global investor, which will become increasingly important as we start to look beyond North America.”

Also announced were separate agreements that would see the raising of an additional $60mn. Certain shareholders are to buy 788,000 shares at $76.02 per share.

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