Tricor Pacific Founders Capital has become Founders Group of Food Companies as the Vancouver firm plans to take its North American food-sector strategy to the next level.
Launched in 2014 by a group of senior private equity and industry pros, Founders has spent the past three-plus years investing its own capital in a range of businesses focused on specialty seafood and meats, prepared foods, and edible gifts and confections.
In all, the firm acquired 10 Canadian and U.S. companies, including platforms Presteve Foods, Ganache Brands, Freshstone Brands and Armand Agra. Together they form a portfolio that generates more than $315 million in revenue.
For Founders, the rebranding marks a milestone in its progress that includes creating a portfolio of “threshold size,” Partner Derek Senft told PE Hub Canada.
The firm is now looking to expand its horizons. Senft says the rebranding will aid this by emphasizing Founders’ family of mature, cash-flow-producing food companies and the long-term domain strategy that is helping them grow.
That strategy is enabled by a larger organization. Since 2014, Founders has tripled its staff complement to 12, divided into two teams focused on deal origination and operations.
The operations team is responsible for portfolio support. In large part this means helping autonomously managed portfolio companies, each in its own distinct food segment, tap into Founders’ common pool of resources and know-how.
Founders’ companies share governance and stewardship practices, business information systems, and tools and processes. Senft says the result is “decentralized but integrated food companies,” which gain new capabilities for pursuing their goals.
Founders’ strategy relies on the experience of its four founding partners. They include Richard Harris, dubbed Founders’ “secret weapon” because of his prior career as CEO of Golden Boy Foods, a private-label food manufacturer, and as an executive at Coca-Cola .
The others are Rod Senft and Trevor Johnstone, co-founders of Tricor Pacific Capital, which acquired Golden Boy in 2007 and sold it in 2014 to food giant Post Cereals for $323 million. Derek, Rod’s son, was previously a vice president at Pender West Capital Partners.
The next three years
Founders will continue to back the organic growth of its existing food companies, mostly through geographic expansion, product extensions and channel penetration, Senft said. It will also support M&A-led growth, particularly for companies in fragmented spaces.
The firm will also explore fresh opportunities in the North American food sector.
Founders aims to add three platforms in new food segments by 2021, Senft said. It is considering a number of areas of potential interest, such as ethnic foods, snack foods, baked goods, and sauces, marinades, dressings and condiments.
The scope of dealmaking will continue as before. The firm will target established food businesses with recurring Ebitda of $3 million to $10 million, mostly in Canada and the U.S. Midwest and West. Acquisitions will typically involve stakes of 75 percent to 100 percent.
Founders sometimes partners with existing owners. This was the case in its most recent deal, the September 2017 acquisition of Armand Agra, a meat and seafood processor and distributor, from Nevada’s Flocchini family.
Significantly, Founders expects to hold assets indefinitely. Food companies are “looking for a strategic and value-adding partner committed to the long haul,” Senft said.
Tricor Pacific Capital three years ago rebranded its fifth fund as Parallel49 Equity, a new PE firm led by former Tricor investment pros. The founders, including Rod Senft and Johnstone, sit on Parallel49’s investment committee.
Rod and Derek Senft are directors of Pender West, a family office.