Colabor, a food distributor based in Saint-Bruno, has filed for creditor protection. This move is aimed at facilitating an official sale process after receiving a purchase offer. In a legal document, Colabor stated that it has garnered interest from potential investors and has received a letter of intent for an acquisition deal. Ongoing discussions are emphasized.
Details of Colabor’s Financial Situation
The company plans to seek an order from the Superior Court of Quebec under the Companies’ Creditors Arrangement Act. This request is to approve a formal sale process and allow investment solicitations. Such steps would provide interested parties an opportunity to submit proposals for the best possible transaction.
- Colabor’s stock trading has been halted on the Toronto Stock Exchange.
- Current stock value stands at 4 cents, equating to a market capitalization of $4 million.
- In July, the company had a market valuation of approximately $100 million prior to a cybersecurity breach.
Colabor’s financial difficulties stem from several factors. The company has faced slowdowns in the restaurant and retail markets over recent years and a challenging macroeconomic environment. Additionally, a critical government contract, representing over 12% of Colabor’s 2024 revenues, is set to expire in 2024. Although the agreement was renewed, the economic conditions at the time were less favorable, severely impacting profit margins.
Impact of Cybersecurity Incidents
The company’s financial health was further impacted following a cyberattack that disrupted supply chains around the busy construction holiday period last summer. An increase in debt was noted in June as Colabor sought to acquire assets from Alimplus, a food distribution business.
Changes in leadership were also notable, as former CEO Louis Frenette stepped down in the wake of the cyber incident, which had severe repercussions for client service levels.
Company Background
Founded in Quebec in 1962, Colabor began as a cooperative of 37 distributors. It has since progressed into a major player in wholesale food distribution across Quebec and the Atlantic provinces. The company covers various market segments including hospitality, institutional markets, and retail.
Colabor’s extensive product range includes dry goods, beauty and personal care items, refrigerated food, frozen foods, and non-food products. The company continues to navigate a complex and challenging market landscape as it seeks a viable path forward.
