SunOpta Gets Oaktree Investment, Board Seats Including Engaged

  • Oaktree invested $85 million in exchangeable preferred shares
  • Activist Engaged Capital is second-biggest shareholder

SunOpta Inc., the Canadian natural and organic food producer targeted by activist fund Engaged Capital, announced a strategic partnership with Oaktree Capital Management, including an investment and board seats.

The company concluded a strategic review announced in June, adding two directors nominated by Oaktree and one from Engaged, its second-largest shareholder, SunOpta said in a statement Friday. Oaktree invested $85 million in exchangeable preferred shares, with proceeds partly used to reduce debt.

“The board has committed to a further review of governance and leadership with a particular focus on continuing to add independent directors with significant operating and supply chain expertise in the food industry,” SunOpta said, adding that incumbent director Douglas Greene had resigned. “The board would expect to announce additional changes shortly.” 

Oaktree has invested in similar companies before, including AdvancePierre Foods, Campofrío Food Group and Diamond Foods. Engaged, the hedge fund run by Glenn Welling, disclosed an active 7.5 percent stake last month and said it had signed a confidentiality agreement and held talks with the company since it announced its review.

SunOpta focuses on organic, non-genetically modified and specialty foods and ingredients. Earlier this year, the company hired Rothschild Inc. to review its operations after Tourbillon Capital Partners urged the company’s board to explore a sale.

Engaged campaigned previously at another specialty foods company, Boulder Brands Inc., which was ultimately sold to Pinnacle Foods Inc. last year. Engaged typically seeks private talks before beginning a public campaign, and often agitates for the sale of targeted companies.

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