SunOpta Secures US$60 Million Equity Commitment

SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL) (TSX:SOY), a leading global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production, today announced that following a review and analysis conducted by a special committee of independent directors (the “Special Committee” ) of its board of directors (the “Board”), it has entered into a financing agreement with funds managed by Oaktree Capital Management, L.P. (“Oaktree”) and Engaged Capital, LLC (“Engaged”), leading alternative investment management firms, which invest in companies with strong, defensible franchises.

Under the agreement, Oaktree and Engaged will invest up to a total of US$60 million in SunOpta in the form of exchangeable preferred shares. Proceeds from the equity investment will be used primarily to invest in the Company’s plant-based foods and beverages business, principally to add capacity via capital projects and to provide incremental liquidity given the current general economic uncertainty.

"Our plant-based food and beverage business is the growth engine of the Company delivering outstanding revenue and EBITDA growth. In 2019, we grew revenue 15% and gross profit 45% in plant-based foods and beverages, and we are confident in the long-term growth potential of this segment. We are making significant investments in this business now to ensure that we can continue to drive aggressive growth in 2021 and beyond. After concluding a comprehensive review of financial alternatives involving a Special Committee of the Board, we are excited to extend our partnership with Oaktree and Engaged. They truly appreciate SunOpta's unique position in the market and the potential value that can be created for all of our shareholders through accelerated growth. We believe this strategic option provides the highest risk-adjusted return from the many options evaluated by the Special Committee,” said Joe Ennen, Chief Executive Officer of SunOpta.

Summary of the Financing

Oaktree and Engaged have committed to purchase up to US$60 million of newly created Series B exchangeable preferred shares to be issued by the Company’s wholly-owned subsidiary, SunOpta Foods Inc. (the “Series B Preferred”) in two tranches. The first tranche consists of US$30 million of Series B-1 Preferred to be issued on or about April 24, 2020, subject to satisfaction of certain customary conditions of closing. The Series B-1 Preferred to be issued in the first tranche will be immediately exchangeable into shares of the Company's common stock at an initial exchange price of US$2.50 per share, which represents a 23% premium to the closing price of US$2.03 per share on April 15, 2020. The Series B-1 Preferred constitute 12.0 million shares as-converted, and on an as-exchanged basis, an ownership level of approximately 12.0% (excluding any conversion of the previously issued 2016 Series A preferred shares) of the Company based on 88.3 million common shares outstanding.