Acquiring Ownership in Arctic Beverages Marks First Step in Diversifying ABD’s Investment Portfolio

September 3, 2014 in News
Explorer: Fall 2014

Until this year, Athabasca Basin Development had invested only in companies that provide services to the mining, resources and exploration industry.

But while people in these industries do indeed consume Pepsi products, acquiring ownership in Arctic Beverages, a Winnipeg- based Pepsi product bottler and distributor, seems to be a bit of a change for the company.

“Our company was born out of opportunities that were available from the activities in the local mining and exploration industry,” says Geoff Gay, CEO of Athabasca Basin Development. “So as we grew and evolved, it naturally happened that new investment opportunities were also servicing the resource industry. It’s an area we know about and are comfortable in, and an industry that we will continue to consider investments in moving forward, because it’s very good business to be in. But we are also open to opportunities in other industries, and our ownership in Arctic Beverages is only the first of others to come.”

It is a willingness to invest and remain open to new opportunities that has fuelled ABD’s success. The company considers investments in any industry, from startups to established businesses, wholly or partially owned, and always invests with an eye for the long term. “When you look at our current portfolio, at first glance, Arctic Beverages doesn’t appear to fit in with the other investments,” says Gay. “But in actuality it fits very well within our investment strategy. The common factor of all our investments is that they are good, solid businesses with committed leadership, and have a high potential for growth. In addition, we also took a look at our overall portfolio and realized that diversifying would be a good strategy to ensure continued success of the company. Arctic was a good fit for all our criteria and we are very excited to have ownership in this excellent company.”

In May, Athabasca Basin was one of three First Nations groups who entered into an agreement to purchase Arctic Beverages, partnering with Prince Albert Development Corp and Manitoba-based Paskwayak Business Development.

The three successful Aboriginal-owned companies formed a strong governance team with years of management and leadership experience. Marv Tiller, a former CEO of Northwest Company, has initiated and completed a large portfolio of acquisitions and investments throughout his career, and brings his expertise as the new Board Chair of Arctic Beverages. Tiller, who oversaw the previous purchase of Arctic Beverages in the early 90s, is very familiar with the company.

Sean Post, who previously led Arctic Beverages for eight years, returned as Arctic’s CEO in May. It was during Post’s time that the company expanded its territory to include over 20% of Canada, diversified its product line, and received multiple awards from Pepsi. “I am excited to have returned to Arctic Beverages and working with the excellent team that is in place,” says Post. “Over the years, Arctic Beverages has enjoyed excellent relationships with its customers, as we not only provide them with quality in-demand products, but we also have a unique understanding of the logistics involved in supplying our products to northern locations. The new ownership really understands the market we serve, and is well equipped to work with us to grow this company.”

“We have enjoyed a successful relationship with Arctic Beverages for many years,” says Richard Glover, President, PepsiCo Beverages Canada.

“Arctic Beverages has always held a proud position as Canada’s only First Nations owned Pepsi franchise and we’re very pleased that they’ll continue to build on this rich legacy.”

“We were impressed by the results achieved by these three First Nations investment companies, and we believe that the new ownership and governance of Arctic Beverages will enable the organization to continue serving as a great PepsiCo partner for many years to come.”

“Our groups form a very solid partnership who share a strong commitment to Arctic Beverages’ long term success,” says Gay. “As owners of numerous successful companies, all of our organizations’ shareholders have a true understanding of the challenging logistics in Northern Canada. I am confident that the experienced management team and governance structure, along with the collective financial capacity of all three owners, forms a very strong foundation and we look forward to pursuing opportunities to grow this company to its full potential.”

Arctic Beverages is the only First Nations owned Pepsi franchise in Canada. Since its formation, the company has expanded to become a distributor of Frito Lay, Canada Bread, Jack Links, Nestle Ice Cream, Parmalat, and Pepsi. Arctic Beverages has customers throughout Northern Manitoba, portions of Northern Saskatchewan, Northwestern Ontario and Nunavut, and has an in-depth knowledge of the northern Canadian market and the local distribution infrastructure. Arctic Beverages has been named Pepsi’s Canadian Bottler of the Year three times since 1998 and was the North American Bottler of the Year in 2007.