Strengthening Québec’s companies
Capital dedicated to Québec SMEs remains a Fonds priority: accordingly, as at May 31, 2013, 82% of the partner companies of the Fonds and its network of regional funds had fewer than 100 employees.
The following are a few examples of investments the Fonds made during the 2012-2013 financial year to fulfil its mission:
- $4.75 million in Sojag, a garden furniture and accessories company, to finance a transfer of ownership.
- $2 million in Sail Outdoors, an additional investment in this outdoor, hunting, fishing, camping and water sports products store to support its expansion in Ontario.
- $8 million in Premier Tech, an additional investment in this leading player in the horticulture, agriculture, industrial equipment and environmental technology industries to support the expansion of its horticulture division in Europe.
- $12 million in AJW Technique, a company that provides a broad range of airplane component repair and overhaul services, to buy back certain assets from Aveos.
- $15 million in Athos services commémoratifs, a group of funeral homes, to help Québec shareholders buy back the majority of the company’s shares.
- $15 million in Vision7 International, one of the 25 best international communications companies in the world, to refinance its debt. The company has two divisions: Cossette and EDC, a network of specialized agencies.
- $17.2 million in Distech Controls, a major player in the global building automation industry, to return control of the company to Québec shareholders.
Unique and crucial financing
The Report on the Importance of Labour-Sponsored Funds to the Economy of Metropolitan Montreal, issued last May by the Board of Trade of Metropolitan Montreal (see Our economic impact) clearly shows that the Fonds de solidarité FTQ is active throughout a business’ growth cycle, from seeding to maturity. In fact, the Fonds often invests money in companies that are just starting up—which is known as venture capital, and the risk may be high, but the Fonds, with its long-term vision, is able to be patient. It also invests in companies that already have a viable product, a fairly developed market, a solid customer base and steadily growing revenues, to help them grow, at various moments in their growth—this growth capital is therefore intended to help them increase their production capacity or strengthen their position, for example. The Fonds invests in companies in both the high-tech and traditional sectors, thereby meeting various market and entrepreneur needs. The Fonds supports its partner companies by providing them access to specialists from its multidisciplinary teams.
A ripple effect
The Fonds’ investment activities complement the investment activities conducted by other investors, as the Fonds’ ability to invest is not limited by a specific horizon. In addition, the Fonds invests in sectors that are less serviced by specialized funds or by government programs. As such, the Fonds is heavily involved in investments made in companies in the seeding phase in Québec and in venture capital investments in traditional sectors. The Fonds makes these investments directly or through specialized funds in which it invests. The Fonds is also a leading investor in several specialized funds, thereby playing a pivotal role that has a ripple effect on these specialized funds.
Lastly, it should be noted that the Fonds de solidarité FTQ’s work is countercyclical: as its history shows, the Fonds sustains a high level of investments when the economy slows down. It demonstrated this once again in 2008-2009, a difficult period when investment liquidities became increasingly scarce for companies.