Bahrain's Investcorp acquires majority stake in US fresh produce distributor

The investment will help the California-based Sunrise Produce to grow organically and through acquisitions

Alternative asset manager Investcorp has been building its distribution and consumer-linked investment portfolio in recent quarters. Photo: Investcorp

Investcorp, an alternative asset manager that counts Mubadala Investment Company as its biggest shareholder, has bought a majority stake in US-based fresh produce distributor Sunrise Produce.

Investcorp will enter into partnership with Sunrise to further boost the company’s growth organically and inorganically through acquisitions, Investcorp said on Monday.

It did not give financial details of the deal or the size of its stake in Sunrise.

“Our latest acquisition of Sunrise continues our philosophy of supporting innovative and sustainable businesses in seeking to realise their ambitions and potential industry-leading growth,” said Tarek Al Mahjoub, head of UAE and Oman for Investcorp’s Private Wealth business.

“Taking a majority stake in Sunrise continues our successful history of investment in the speciality distribution space.”

The Manama-based alternative investment manager has increasingly focused on investment in distribution and consumer-linked businesses in recent quarters.

Its portfolio investments in value-added speciality distributors across various end-markets include stakes in Fortune International, S&S Truck Parts, KSI Auto Parts, Arrowhead Engineered Products and Berlin Packaging.

Founded in 1991 and based in Fullerton, California, Sunrise sources a wide range of fresh produce and gourmet products from more than 400 suppliers.

It serves about 2,000 customers across a variety of sectors, including food services, education, health care and retail.

Sunrise will continue to be led by president and chief executive David Sapia, who also remains a significant shareholder in the company.

“Fresh produce distribution in the US is a highly fragmented $70 billion market that has consistently shown resilience throughout economic cycles,” said Ali Al Rahma, a private equity specialist at Investcorp Private Wealth.

The company’s business model and its disciplined approach have “propelled them to exceptional, industry-leading growth”, he said.

Established more than four decades ago, Investcorp has grown to become one of the leading alternative asset management companies in the region.

The company went on an acquisition spree during the Covid-19 pandemic to capitalise on lower asset valuations and is bullish about the growth prospects for its portfolio.

Alternative asset managers invest outside public markets, including private equity, private credit, venture capital, hedge funds, commodities, property and infrastructure.

Investcorp said it had $47.2bn in total assets under management as of June 30, including assets managed by third-party managers.

Investcorp, which is planning a rapid expansion of its GCC and Asian investment portfolio, expects its assets under management to more than double to $100 billion in seven years, executive chairman Mohammed Alardhi told Bloomberg last year.