Joe McCarthy had been an auditor with KPMG, held an executive post at Union Bank, and was happy as chief financial officer and executive vice president at Trojan Battery Co. in Santa Fe Springs when a friend asked if he’d like a new challenge.
The opportunity at Sunrise Growers Inc. in Placentia came in 2005.
He’s been there since.
McCarthy is CFO and senior vice president of finance & administration at the frozen fruit distributor. He’s also the Business Journal’s CFO of the Year in the Lifetime Achievement category (see related stories pages 1, 8, and 10).
He came in just as one buyer was trying to digest Sunrise and helped craft three more buyouts in 10 years, culminating in its October 2015 acquisition by SunOpta Inc. in Canada for $444 million—13 times higher than the $33 million it fetched in the first deal McCarthy worked on.
SunOpta makes organic and non-genetically modified products that include almond milk and nutrition bars.
Sunrise would at first glance seem to be an odd fit with McCarthy’s professional arc.
It delivered fresh and frozen produce, including vegetables, and ran its own farms.
Trojan makes batteries.
But both Trojan and Sunrise had local, family-ownership roots, however, and each had begun to attract private equity.
McCarthy had also worked for specialty sauces and seasonings maker Case Swayne Co. Inc.—based in Corona and with a facility in Santa Ana. Case Swayne also had caught the eye of a private equity firm.
His experience got a workout at Sunrise.
Sunrise had sold in 2003 to Boston private equity firm Heritage Partners Inc.
Sunrise traded hands twice more between McCarthy’s arrival and SunOpta’s purchase in October 2015.
Sun Capital Partners Inc. in Boca Raton, Fla., bought out Heritage Partners in June 2008 for $33 million.
Paine & Partners LLC in New York bought Sunrise from Sun Capital in March 2013; Paine typically invested as much as $150 million in deals. Paine made three acquisitions under the Sunrise umbrella and sold the company to SunOpta for $444 million.
Heritage had hired Chief Executive Edward Haft not long before McCarthy signed on.
Sunrise “did some farming, they did some fresh distribution, they had the frozen side,” McCarthy said.
“We changed the model,” he said. “We wanted to be the absolute leader in frozen fruit.”
Sunrise now buys, packages and sells strawberries, mangos, blueberries and other fruit to retailers including Trader Joe’s, Target, Walmart and Costco, and restaurants including Jamba Juice, McDonald’s and Denny’s.
The unit has $400 million to $450 million in revenue—70% from stores and the rest from restaurants.
Sunrise became the basis for a new “healthy fruit group” for SunOpta with 1,000 to 1,500 workers, depending on the season, in California, Kansas and Mexico; about 80 are in Placentia.
SunOpta 10 years before had bought Cleugh’s Frozen Foods Inc. in Buena Park and Pacific Fruit Processors Inc. in South Gate.
It closed the Buena Park facility several years ago; McCarthy has helped run the South Gate operations since SunOpta bought Sunrise. He led strategic planning, human resources and information technology for Sunrise.
Publicly traded SunOpta has a CFO—and McCarthy has a deep resume and plenty of personal interests.
He hikes and bikes with Kathy, his wife of 36 years. Their daughter recently married; their son is with Deloitte LLP—like the pal who introduced McCarthy to Sunrise Growers years ago.
He’s involved in youth mentoring and nonprofits—for University of California-Irvine and American Red Cross, among others.
He “learned a lot” at Trojan Battery and calls Keith Swayne, his boss at Case Swayne, “absolutely a mentor.”
“I would love to help other companies,” perhaps as an adviser to family businesses—with or without private equity attention.
He’s got nearly a lifetime of achievement to offer.