For the second year in a row, Sollio, formerly La Coop fédérée, the largest agri-food cooperative in Quebec, is completing a large inflow of funds from major investors and strengthening its balance sheet at the end of the fiscal year.
Posted Oct 6, 2020 at 7:00 am
Sollio obtains $ 150 million through a private issue of preference shares from a group consisting of three institutional investors in Quebec – Caisse de dépôt et placement, Fonds de solidarité, Fondaction – as well as the investment company Robobank Capital, a subsidiary of banking giant Robobank, from Dutch soil.
By the same date last year, Sollio had obtained 300 million in capital from a group consisting of the same three Quebec institutional investors, to which was added the investment company Desjardins Capital, a subsidiary of Desjardins Group.
"This capital injection last year was to support the finalization of our 2015-2020 strategic business plan, which strongly focused on growth projects through acquisitions," explains Gaétan Desroches, Sollio's head of management, in an interview with La Presse.
“The new contribution of 150 million supports the start of our 2020-2025 business plan. This plan prioritizes internal efficiency and productivity improvement projects to consolidate our growth through acquisitions and better prepare for the post-COVID era. We also want to research and develop projects to & # 39; expand the value chain & # 39; in our main business sectors. & # 39;
Types of projects
When asked about the types of projects the cooperative will favor, the CEO provided a few. “In our construction market subsidiary BMR, for example, we are accelerating the expansion of its e-commerce capabilities via the Internet and delivery to customers,” said Gaétan Desroches. In our agri-food divisions, we focus on research and development of projects that can increase the level of food processing and food self-sufficiency in Quebec. »
Furthermore, in the cereal sector, where Sollio and regional cooperatives [acteurs] are important, we could invest in projects to develop plant-based protein foods, such as soybeans grown in Quebec, which are largely exported for processing in other countries .
M. Desroches expects to deliver encouraging results by the end of the 2020 fiscal year, which ends in the third week of October. “Despite the impact of COVID-19 on some of our customers, particularly in restaurants, but also our operations in our processing plants, we are all looking forward to a good year,” said Gaétan Desroches.
"Without a doubt, operating profit (EBITDA) will be below our pre-COVID-19 expectations. But we do well when we compare ourselves to other sectors that are much more affected."
At the end of October 2019, Sollio (then La Coop fédérée) had closed its fiscal year with consolidated sales of 7.28 billion, an increase of 7.7% over the previous fiscal year. However, members' surplus before dividends and taxes was down two-thirds to $ 79.3 million.
Sollio took advantage of the contribution of 300 million at the end of fiscal year 2019 to increase its share capital as a cooperative to just over 990 million.
With the new contribution of 150 million recently completed, Sollio's share capital should exceed the $ 1 billion threshold, approximately 1.1 billion.
“As a cooperative, we don't have access to the stock exchange like other companies to issue shares and thus raise additional capital to finance our development,” recalls Sollio's CEO.
"Hence the importance of relying on investments from reputable financial institutions, demonstrating their confidence in our strategies and our cooperative business model."