CDPQ’s PE Arm Raises Activity Level

By David G. Barry


Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund, is taking part in two transactions, one recapitalizing a contract development and manufacturing organization and another involving the purchase of a processor and marketer of canned and frozen vegetables.

CDPQ, which had assets as of December 31 of 420 billion Canadian dollars (US$328 billion) has been relatively quiet in making private equity investments in 2022. The two new transactions may be a sign that the fund sees now as an opportune time to invest.

In the first deal, it is working with ArchiMed, a healthcare-focused private equity firm, to recapitalize Corealis Pharma. Terms were not disclosed. The transaction is aimed at expanding the drug development services that Corealis offers.

Founded in 2005 and based in Laval, Quebec, Corealis focuses on formulating and manufacturing solid dosage oral pharmaceuticals – tablets, capsules and granules – during preclinical and clinical pre-commercialization trials.

CDPQ’s second deal involves it teaming up with another Canadian fund, Fonds de solidarité FTQ, to acquire a 65% stake in Bonduelle Americas Long Life (BALL) from The Bonduelle Group. BALL’s enterprise value is CA$850 million (US$663 million). This would put the purchase price at CA$552.5 million (US$431 million).

BALL processes and markets its canned and frozen vegetables in the United States and Canada through private labels, third-party brands and its own brands, Arctic Gardens and Del Monte. It generated revenue of $735 million in 2020-2021. Bonduelle decided to sell BALL after a strategic review last year.

In a statement, Kim Thomassin, executive vice president and head of Quebec at CDPQ, said that the fund is “especially proud to become a shareholder of one of the principal players in the North American food industry.” She said that alongside FTQ, CDPQ will back BALL’s “ambitious expansion plan” to become a Canadian leader and further develop the U.S. market.

CDPQ’s private equity investments in 2022 include taking part in a $325 million financing earlier this year of eSentire, Inc., a security company. The financing valued eSentire at more than $1 billion. Warburg Pincus is the company’s majority shareholder.

Private equity is CDPQ’s second-largest investment segment, valued at CA$82.5 billion ($64.36 billion) at the end of 2021. That was just behind credit, which was valued at CA$83.8 billion ($65.37 billion).

CDPQ generated $47.5 billion, or a 13.5% return in 2021. Equities, which private equity is a part of, had a 24.6% return in 2021.