Canadian private equity firm NOVACAP is partnering, through its NOVACAP Industries IV investment fund, with institutional partners to invest more than CAD165 million in KDC, a Québec manufacturer of health and beauty-care products.
The institutional partners include the Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ, Investissement-Québec, Export Development Canada (EDC) and Fondaction CSN.
KDC has its head office in Knowlton, Québec, where its main plant is also located. In addition, KDC has plants in Mississauga, Ontario, as well as in Lynchburg, Virginia, and Columbus, Ohio. Altogether, the company employs 2,200 people, including nearly 900 in Knowlton.
KDC is already linked to NOVACAP through its NOVACAP II Fund, which has owned it since 2002. This initial investment and NOVACAP's continuing involvement in KDC's development have enabled KDC's annual sales to rise from CAD60 million to a forecast CAD500 million this year. During this time, NOVACAP and its partners have invested more than CAD140 million in KDC's development, to make the company a key North American player in vertically integrated manufacturing for the health and beauty-care industry. These investments included the construction of a technologically leading edge CAD58 million plant in Colombus.
With the support of its shareholders, KDC plans to implement an ambitious growth plan that will position it as a first-choice partner for brand owners around the world in the field of beauty- and personal-care products, aiming for the billion-dollar mark in annual revenues within a few years.
"To deal with the many and complex challenges of the global marketplace, Fortune 500 companies are working increasingly in partnership with suppliers that have the size, background and entrepreneurial spirit to serve all their brands and markets," says Michel Côté, KDC chairman and NOVACAP senior partner. "NOVACAP's strategy consists of leveraging KDC's unique business model as a global supplier of manufacturing solutions and capitalising on its competitive advantages. With clear goals and calculated dynamics for success, we strongly believe that KDC is among the companies best positioned to develop new markets and meet this growing demand."
Christian Dubé, executive vice-president, Québec, of the Caisse de dépôt et placement du Québec, says: "At a time of strong global competition in the manufacturing sector, this transaction reflects our strong intent to support Québec companies in their development and their national and international expansion."