Sun Rich Fresh Foods Inc. (Sun Rich) provides high-quality, fresh-cut fruits and salads to consumers, foodservice operators, and retailers across North America. The company was founded in Vancouver over 25 years ago and has grown from a staff of four to over 575 employees at its facilities in BC, Ontario, Pennsylvania and California. Sun Rich continues to grow its product line and geographic reach and the management team is always on the lookout for expansion opportunities.
When a strategic niche opened up in late 2015 to further expand the company’s reach in the American market by partnering with an east coast food processor, the business case was great but the timing for financing was less than ideal. Sun Rich operates in a seasonal market and the winter months are characterized by higher costs and a slowdown in sales. Sun Rich was going to need additional working capital to support its expansion plans and went looking for options.
Mutual respect and expertise drives deal forward
Management’s search soon led Sun Rich to First West Capital and a meeting with co-founder Kristi Miller and senior associate Amrit Minhas. VP Finance Steve Davies states, “We met with several organizations but the team at Sun Rich all felt we had a great fit from the very first meeting with Kristi and Amrit. They took ownership of the deal from our first contact and their willingness to put our interests first really set them apart.”
Kristi and Amrit shared that first impression and were equally impressed with Sun Rich and its management team. Amrit says, “Annual sales are strong and the company’s production processes are lean. The whole corporate culture at Sun Rich centres on continuous improvement, waste reduction, and innovation. They have recently made substantial capital investments to further improve efficiency, expand distribution, and fuel continued growth. Strategically they are very savvy and have a history of successful expansion.”
Solid cash flows pave the way for a flexible financing solution
Despite the business’ seasonality, Sun Rich produces solid financial results and is therefore an ideal candidate for sub-debt financing, which relies on positive cash flow rather than the more traditional assets required as collateral for bank financing. One of the key features of subordinated debt financing is flexibility and First West Capital worked closely with Sun Rich to ensure the final agreement was tailored to fit the company’s unique needs.
Steve states, “We needed some flexibility on a few key terms and First West really took that to heart with their offering. Other firms we spoke to were more rigid in what they could do for us and didn’t demonstrate the same ability to meet to our requirements. This is what really sold us on First West Capital and we would put them at the top of our list the next time we go shopping for financing.”
With financing from First West Capital in place, Sun Rich has completed the successful rollout of its east coast partnership and is achieving impressive results.