M&A Summary: Q4 2018 - Food & Beverage

February 20, 2019

There was significant activity in the Canadian food and beverage space in Q4 2018, with 23 deals involving a Canadian party either announced or closed during the period. This represents a decrease from 37 transactions in Q4 2017. Canadian food and beverage businesses continue to be active buyers of both domestic and international companies, as well as attractive acquisition targets for foreign buyers.

Despite challenging macroeconomic factors such as volatile equity markets, geopolitical uncertainty, and trade disputes, cross-border deal activity remains high as companies continue to prioritize the addition of scale regardless of geographical location and regulatory risk. Entering 2019, these macroeconomic factors will continue to have an impact on the food and beverage M&A landscape. Businesses will look to focus on identifying buyers who have an appetite to transact despite a certain level of market uncertainty.

The food and beverage industry continues to offer attractive opportunities for growth, but companies must find ways to invest proactively and respond to dynamic consumer preferences to remain competitive.

Quaterly F&B deals involving Canadian businesses Buyer & target geography M&A activity

Q4 Transaction Highlights
1. Giraffe Foods A Toronto-based private label manufacturer of sauces, marinades, dips, and dressings. Was acquired by Graham Partners, a U.S.-based private equity firm in December 2018.
2. Sweet Jesus Ltd. One of the fastest-growing Ice cream chains in Canada, was acquired by International Franchising Inc., a Canadian-based franchisor and licensor of frozen yogurt and Ice cream outlets, in November 2018.
3. Parmalat Canada, Inc. An Ontario-based dairy company, entered Into a definitive agreement to acquire the Canadian natural cheese business of Kraft Canada Inc., comprising natural cheese brands such as Cracker Barrel and P'tit Quebec, for C$1.6 billion in November 2018.
4. Newstrike Brands Ltd. (TSXV:HIP) Owner of Up Cannabis Inc., a licensed cultivator and seller of cannabis, acquired Neal Brothers Inc., a Canadian producer of snack products Including salsa tortillas, and pretzels, on November 2018 to create a co-branded company to develop and sell cannabis edibles.
5. Richardson International An agricultural and food processing business, entered Into a definitive agreement to acquire Wesson Oil Brand of Conagra Brands, Inc., an edible oil brand In the U.S. that sells vegetable, canola, corn, and blended oils, for $242.4 million in December 2018.

To learn more, please contact us or:

Bob McMahon
National Leader, Retail and Consumer Business

Melissa Krakar
National Leader, Food and Beverage

Ryan Farkas
Partner, National Corporate Finance Leader

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