Colabor Group (GCL) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition consolidates position as the largest food distributor in Quebec, accelerating growth and expanding presence in Western Quebec and Montreal.

• Targets a complementary customer base, especially independent restaurants, HRI sector, and retail, with limited overlap.

• Adds Toupret/Tout-Prêt, a ready-to-use pre-cut fruits and vegetables business, aligning with industry trends and offering higher-margin products.

• Enhances purchasing power and leverages a combined distribution network covering 90% of Quebec's addressable market.

• Strengthens local identity, supports Quebec's food industry and artisans, and brings experienced staff.

Financial terms and conditions

• Purchase price is $51.5 million, subject to adjustments, for Alimplus's food distribution assets and all shares of Toupret/Tout-Prêt.

• Transaction adds approximately $225 million in annual sales.

• Includes a six-year distribution agreement for four Mayrand Alimentation stores.

• Financing includes an amended and increased $95 million senior secured credit facility, $5 million increase in credit facility, extension of $15 million subordinated debt, and a new $15 million deeply subordinated debt.

• Leverage ratio expected to rise to mid-threes post-acquisition, with a plan to reduce through operational cash flows.

Synergies and expected cost savings

• Revenue synergies expected from cross-selling private label and specialty products, especially with Toupret/Tout-Prêt's offerings.

• Enhanced purchasing power anticipated to improve supplier terms and profitability.

• Best practice sharing, process optimization, and category management planned to drive operational efficiencies.

• Transaction is accretive and expected to unlock immediate and long-term value.