Following a hectic summer that included an activist investor targeting the company, SunOpta Inc., a maker of organic and nongenetically modified food ingredients, accepted an $85 million investment from Oaktree Capital Management and agreed to consider changes in its operations.
Oaktree is getting preferred shares in SunOpta for its money. SunOpta will use the funds to pay down debt.
SunOpta is based in Toronto, but most of its corporate functions operate out of its U.S. headquarters in Edina. Oaktree is a Los Angeles-based firm that specializes in distressed food companies, and has made similar deals at Diamond Foods and AdvancePierre Foods in the past.
As a part of the deal, SunOpta is also giving two board seats to Oaktree advisers and one to Engaged Capital, the activist fund that announced last month a 7.5 percent stake in SunOpta, making it the second-largest shareholder after Oaktree.
SunOpta was battered this year over potential listeria contamination in sunflower seeds processing at its plant in Crookston, Minn.
As a supplier to many food companies, SunOpta’s recall caused a ripple effect of other recalls, including granola bars made by Kellogg, Quaker Oats and General Mills. The company is considered undervalued as its products sit at the intersection of several huge consumer trends, including organic and non-GMO.
Many investors have been critical of SunOpta’s management, which leadership acknowledged on a conference call Friday.
“Operational excellence is not yet present in the company. We have had a couple of operational missteps at the end of last year, but also at the beginning of this year, and that has put pressure on our stock,” SunOpta Chief Executive Rik Jacobs said. “We believe in the potential of our company going forward ... this was the most compelling offer that we saw.”