Business succession

BACKGROUND

An aging population means a huge turnover of business ownership in the coming years. While it may appear worrisome, this prospect can be a business opportunity for potential buyers.

INDUSTRY CHALLENGES

In order to keep ownership and jobs in Québec and to ensure business continuity, owners will have to address the following challenges:   

  • Industry consolidation, leading to competition for abroad;
  • Difficulty securing the financial and strategic support needed for a buyout by a family member or management.

WHERE THE FONDS FITS IN

Using its expertise, capital and vast network, the Fonds de solidarité FTQ supports owners financially and strategically by offering two different solutions designed to simplify the acquisition and sale of a business:  

Minority interest

The buyer or seller wants to hold on to the majority of the voting shares and is looking for a financial partner, shareholder or lender.

Majority interest 

The seller (for instance, a major shareholder) or the buyer (for instance, a management team that does not have the means to buy out the owner) is looking for an interim partner until a management team can take ownership a few years later.

MINORITY INTEREST

Our participation ensures an optimal, uncomplicated transaction that serves the interests of all the stakeholders. With our flexible solutions, sellers obtain tangible, significant advantages, namely:  

  • The Fonds takes an equity stake of up to 49%, leaving control in the hands of the family, management or a third party;
  • An unsecured loan with extremely flexible terms - SME Transfer Solution;
  • Exit horizon of 10+ years.
MAJORITY INTEREST

In order to ensure the continuity of the business, we design a growth and expansion plan for the new owners: 

  • We support the strategic plan through our expertise and alliances or exchanges with our network;
  • Limited leveraging;
  • Patient capital;
  • Participative management together with the management team.
STRATEGIC COACHING

Thanks to its strong internal and external networks of professionals, the Fonds optimizes the company’s growth, thereby increasing the probability of a successful transfer.

FINANCING

The Fonds tailors its offer to match the individual needs of its partner companies. We offer patient capital that takes into account the challenges businesses face and the time they need to see their projects to fruition.

FINANCING CRITERIA

The Fonds gives priority to businesses that satisfy, among others, the following criteria:

  • Competent, dynamic and credible teams with operating experience;
  • Shareholders and officers receptive to investors, alliances and partnerships; 
  • Realistic concepts and business plan;
  • Promising market outlook and profitability;
  • Competitive advantages;
  • Preservation and creation of lasting jobs.


In addition to these general criteria, the Fonds has specific criteria for each type of interest:  

MINORITY INTEREST

  • Ideally, a successor has already been identified;
  • Excellent financial health;
  • Continuous growth plan. 

MAJORITY INTEREST

  • EBITDA of over $35.5 million;
  • Profitable, growing business with strong potential;
  • The buyer must invest as well.

SPECIALIZED TEAM

There are many advantages to partnering with our team, including:  

  • Solid expertise in business acquisition and sale;
  • Excellent grasp of succession-related issues and needs;
  • Close cooperation with the sector teams;
  • Strategic support in the short, medium and long terms;
  • Proactive and close by.

INVOLVEMENT IN THE INDUSTRY

The Fonds is actively involved in the business succession sector.

SPECIALIZED FUNDS

The Fonds de solidarité FTQ has investments in:

  • Fonds Québec Relève
INDUSTRY ASSOCIATIONS

The Fonds provides financial support to the following associations: 

  • HEC Montréal / l’Institut sur la gouvernance d’organisations privées et publiques (SME governance course)
  • Chaire de développement et de relève de la PME/HEC Montréal (succession) 

A prestigious association

Are you looking to buy or sell a business? Visit the "From Success to Succession" Web site (www.fromsuccesstosuccession.com), created by the Chaire de développement et de relève de la PME de HEC Montréal, in collaboration with the Fonds de solidarité FTQ. 

On this site you’ll find questions to think about and an action plan for every type of business transfer situation.

Check our sectoral experts

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Our experts

Jocelyn Moreau

Jocelyn Moreau

Portfolio Manager, Buy-out investments

514 383-2574

jmoreau@fondsftq.com

Jocelyn Moreau

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Press Release

March 17, 2011

Québec 2011 Budget: Fonds de solidarité FTQ Invests $57 Million in Business Succession and Cultural Enterprises

Read press release

Financed companies

Fonds de solidarité FTQ © 2011