Colabor Group Expands Food Distribution with New Acquisition

Colabor Group Inc. Acquires Alimplus Food Distribution Assets

Colabor Group Inc. (TSX: GCL) is making headlines with its recent agreement to purchase key food distribution assets from Alimplus Inc., renowned for its operations under the Mayrand Plus banner. This acquisition is set at a significant price of $51.5 million, contingent on customary adjustments.

Strategic Importance of the Acquisition

The acquisition will allow Colabor to expand its footprint in the food distribution sector significantly. The transaction encompasses not just the assets related to food distribution, but also includes the entirety of Tout-Prêt Inc., a subsidiary of Alimplus specializing in the distribution and preparation of cut fruits and vegetables. Notably, while the Groupe Mayrand Alimentation stores are not part of the acquisition, Colabor will establish a distribution agreement with them for an initial term of six years. This strategic partnership is expected to drive synergy between Colabor's existing operations and Tout-Prêt's offerings.

Alimplus: A Legacy in Food Distribution

For over 40 years, Alimplus has been a significant player in the Quebec food distribution landscape, serving various sectors including restaurants, institutions, and hotels. Facilities in Drummondville, Anjou, and Quebec City contribute to its strong market presence. Together with the new distribution agreement, the annual sales from these activities are projected to reach approximately $225 million, emphasizing the potential for growth and profitability.

Leadership Insights

Mr. Louis Frenette, President and CEO of Colabor, expressed the strategic nature of this acquisition: "This significantly accelerates our growth strategy and establishes us as a leader in Quebec's food distribution landscape. The ability to broaden our customer base and leverage system synergies is invaluable." His optimism reflects the expected positive impact this acquisition will have on their operational capabilities.

Vision for Future Growth

In alignment with this acquisition, Mr. Pierre Lapointe, President and CEO of Alimplus, stated his excitement about the partnership, believing it to be beneficial for both companies, employees, and customers. The shared values and cultural fit between Colabor and Alimplus are expected to enhance mutual growth opportunities.

Financing the Acquisition

The financing aspect has been carefully structured with Colabor announcing an amendment to its senior secured credit facility, increasing it to a total of $95 million. Additionally, there will be an extension of the $15 million subordinated debt arrangement with Investissement Québec (IQ), alongside a new financing agreement for another $15 million of deeply subordinated debt with IQ. This strategic financial approach aims to ensure robust support for the acquisition process.

Accretive Value for Shareholders

Colabor emphasizes that this acquisition will not only be immediately accretive to shareholders but is also expected to generate long-term value. Pierre Blanchette, Senior Vice President and CFO, expressed gratitude towards their banking partners and Investissement Québec for their ongoing support, which enables the company to execute its strategic plans effectively.

Upcoming Communications

As part of the acquisition discussion, Colabor will conduct a conference call to further elaborate on the transaction. Individuals interested in gaining insights into this deal can participate by calling specific numbers provided for North America. A recording of the session will be accessible post-event as well.

About Colabor Group Inc.

Colabor is a prominent distributor and wholesaler serving diverse markets across Quebec and the Atlantic provinces. The company's portfolio includes specialty products such as seafood, meat, and various food-related items, thus catering to hotels, restaurants, and institutions efficiently. Continued growth and innovation remain at the forefront of their mission.

Frequently Asked Questions

What is the significance of the acquisition for Colabor Group?

This acquisition positions Colabor as a leader in the Quebec food distribution market and expands their customer base significantly.

What role does Tout-Prêt play in the acquisition?

Tout-Prêt is included within the acquisition, specializing in the distribution of cut fruits and vegetables, enhancing Colabor's product offerings.

What financing arrangements have been made for the acquisition?

Colabor has increased its credit facility and secured subordinated debts to finance the purchase, ensuring a strong financial foundation.

How long is the distribution agreement with Groupe Mayrand?

The distribution agreement is structured for an initial term of six years, securing ongoing operations post-acquisition.

What are the future growth prospects for Colabor following this acquisition?

The acquisition is anticipated to drive significant growth through synergies, new customers, and enhanced operational efficiency.

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