Canadian labor fund invests in cocao truffle operation

The Fonds de solidarité FTQ (Fonds) has made an investment in the Canadian subsidiary of France’s Chocmod, a global manufacturer and distributor of cocoa truffles, for a minority stake in the business.

The investment, backed by a loan from National Bank of Canada, will help finance Chocmod’s continued growth across North America.

Fonds is a development capital fund that invests the savings of 618,000 Quebecers, having partnered with more than 2,600 companies and has nearly 618,000 shareholder-savers.

Company spokesperson Patrick McQuilken told Agri Investor that in the 12-month period ending November 2016 the fund returned 7.5 percent to its shareholders through investments with typical hold periods between 7-10 years.

One in seven Quebecers is a shareholder, and 80 percent of the portfolio consists of private equity ownership, he noted. The fund’s focus is on long-term partnerships focused on the development of its portfolio companies.

“Note that I use the word partner,” McQuilken said. “We have specialized investment teams that work on long-term development.”

The Chocmod investment falls into the agri-food bucket of the fund’s four investment areas, which also include aerospace, forest/wood and life sciences, and it was one of many deals that have resulted in the injection of both debt and equity into growing companies.

“All investments go through a rigorous due diligence process and part of the mission of the fund is to invest in non-guaranteed capital, so when we make loans they are unsecured and may also go into the company’s stock,” McQuilken added. 

Founded in 1948, Chocmod was acquired by Ghislain Lesaffre and Antoine Fortin in 2008. Chocmod’s plant in Saint-Jean-sur-Richelieu opened in 2011 and exports truffle products to the US.

It is understood to be the only French cocoa truffle confectionary in North America, producing the Truffettes de France-branded products. With the Fonds deal, the founders welcome their first outside shareholder.

“Being close to the US border gives us access to a very important market, and the fact that France and Québec share a common language facilitates communication between our two plants,” said Ghislain Lesaffre, president Chocmod Canada, in a statement.

“Now, with the new investments of the Fonds de solidarité FTQ and National Bank, we have the means to continue growing here in Québec.”

As of November 2016, Fonds had $12.2 billion in net assets, and through its current portfolio of investments has helped create and protect over 187,000 jobs, according to company documents.

The fund recently made a $3 million investment backing Lufa Farms, a Montréal-based developer of urban rooftop gardens, which is helping to build a 63,000 sq ft greenhouse in Anjou, Québec.

That deal marked the fund’s third investment in greenhouses. McQuilken noted that the greenhouse sector is particularly attractive given the ability to harness abundant rainfall in Québec. Viau, the cold cut business, is among other agri-food businesses in the Fonds’ portfolio.