Canadian pension fund manager the Caisse de dépôt et placement du Québec has committed another $100 million to the Québec Manufacturing Fund LP (QMF), a private equity fund formed in 2006 to invest in Québec businesses in the manufacturing sector that present attractive opportunities and have the potential to make significant improvements to their operations. With assets under management now totaling $200 million, the Saint-Bruno, Québec-based QMF will enter its second phase of investment activity. Since its inception, the fund has completed investments involving five Québec manufacturers: Avant-Garde Technologie CMFA Inc, Ezeflow Inc, Fraco Products Ltd, Hason Steel Products Inc, and Liberty Spring Inc.
A renewed commitment to Québec’s manufacturing sector – La Caisse Injects another $100 million into the Québec Manufacturing Fund
MONTREAL, Dec. 17, 2013 /CNW Telbec/ – La Caisse de dépôt et placement du Québec, the main sponsor of the Québec Manufacturing Fund (QMF), has announced the injection of another $100 million into the fund. The new investment creates phase II of the fund, positioning the QMF to continue to help Québec’s manufacturing companies develop and grow.
“To prosper, Québec’s manufacturing companies have to compete globally, put in place succession plans and optimize their business processes. To address these challenges, La Caisse intends to support Québec’s manufacturing sector by offering it new capital as well as the QMF managers’ outstanding expertise,” said Normand Provost, Executive Vice-President, Private Equity, at La Caisse. “The fund enables us to earn returns for our clients while generating economic benefits for Québec.”
“The managers of the Québec Manufacturing Fund welcome phase II of the QMF. It will enable us to continue to play an active role in the development of Québec’s manufacturing companies,” stated Claude Couvrette, a partner in the Québec Manufacturing Fund. “We thank La Caisse de dépôt et placement du Québec for its major involvement in this sector.”
The support provided by the Québec Manufacturing Fund goes far beyond financial assistance. The fund works closely with the management of its investee companies to improve their profitability, determine priority action and coordinate its implementation.
With this new financial commitment, the QMF will support manufacturing companies that have developed technologically advanced niche products. The selected companies will also be required to demonstrate strong global export potential and have their decision-making centres in Québec.
La Caisse first invested $100 million at the time of the creation of the QMF.
A fund with a proven track record
Since its inception, the QMF’s managers have successfully completed growth-oriented projects with five Québec manufacturers. Working with senior management, they have contributed to business development, optimized operations and facilitated mergers and acquisitions. The following are two notable investments.
Since the QMF got involved with pipe fittings manufacturer Ezeflow, the company has made two major acquisitions, one in Edinburgh, Scotland, and the other in Pittsburgh, United States. As a result, Ezeflow has expanded its product line and diversified its markets.
In addition to the financial package, the QMF was actively involved in all phases of both transactions, including preliminary negotiations, due diligence and legal agreement.
“The partnership with the QMF gives us operational expertise vital to the success of our future projects,” said Jacques Latendresse, Co-president of Ezeflow.
In less than three years, the company’s sales have increased by more than 50%.
Fraco Products Ltd, St-Mathias-sur-Richelieu
Fraco, a manufacturer of construction work platforms, has been collaborating with the Québec Manufacturing Fund since 2007. The two organizations conducted a business opportunity analysis, which determined that Fraco’s line of products would be strategically rounded out with a line of construction elevators.
The QMF played an active role in the negotiation of a manufacturing and global distribution agreement with a Swedish construction elevator designer and was involved in adapting the equipment to the North American market.
After its first year on the market, the company has sold more than 15 units and received orders for more than 80 others.
The Québec Manufacturing Fund has also worked with Fraco’s management team to implement marketing strategies covering promotion, sales, distribution and pricing.
“We’re very pleased with the Québec Manufacturing Fund’s involvement in our Company. With this solid partner, the relationship goes beyond a simple financial arrangement. The QMF provides a full range of services that covers our company’s operations and long-term development. Its recognized expertise will enable us to step up our penetration of the North American market, increase our output and strengthen our position as a North American leader,” said Armand Rainville, President of Fraco Products Ltd.
Fraco does business in Canada but also operates in the United States, India, the Middle East and Europe.
In addition to Fraco Products Ltd. and Ezeflow, the Québec Manufacturing Fund has invested in Liberty Spring Inc. of Montmagny, Hason Steel Products Inc. of Lanoraie and Avant-Garde Technologie CMFA Inc. of Trois-Rivières.
ABOUT LA CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
La Caisse de dépôt et placement du Québec is a financial institution that manages funds primarily for public and private pension and insurance plans. As at June 30, 2013, it held $185.9 billion in net assets. As one of Canada’s leading institutional fund managers, La Caisse invests in major financial markets, private equity, infrastructure and real estate globally. For more information: www.lacaisse.com
ABOUT THE QUÉBEC MANUFACTURING FUND
The $200-million Québec Manufacturing Fund L.P., sponsored by La Caisse de dépôt et placement du Québec, has a mandate to identify profitable Québec manufacturing companies that present attractive business opportunities and have the potential to quickly make significant improvements to their operations. The QMF combines the financial expertise of La Caisse de dépôt et placement du Québec with the operational expertise of four experienced managers. The Fund assists entrepreneurs in Québec’s manufacturing sector with their projects by providing financing and expertise for business development, operations management and financial management. http://fondsmanufacturier.com/
SOURCE Caisse de dépôt et placement du Québec
For further information:
Interviews may be arranged with managers from La Caisse and the QMF, as well as with executives of the manufacturing companies that have received assistance from the Québec Manufacturing Fund.
For more information or to schedule an interview:
Senior Adviser, Media Relations
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