See the original article (french only) : La Presse
“During the 10 years with our previous shareholder, the American fund Wynnchurch Capital, the anticipated growth plan did not materialize as expected. But after finding new investors, Quebecers at that, we can give new impetus to our ambitions,” says Martin Roy, President and CEO of Pro-Fab, in an interview with La Presse.
“In fact, within five years, we aim to double the level of Pro-Fab's activities. That is to say, to increase our deliveries from 500 to 1,000 factory-built buildings, with a turnover approaching $200 million.”
How can this be achieved?
Firstly, Martin Roy explains, by stepping up efforts to expand market share in the already booming market for residential and commercial buildings in Eastern Canada and the border states of the American Northeast.
Secondly, by reviving growth through acquisitions, along two main lines. Firstly, through the desire for vertical integration of activities with, for example, the acquisition of a manufacturer of doors and windows or kitchen cabinets.
Secondly, to expand its market geographically beyond the reach of its main plant in Vallée-Jonction, Beauce, and that of its subsidiary Guildcrest Homes located in Morewood, Eastern Ontario, halfway between Cornwall and Ottawa.
This geographic expansion could be achieved through the establishment of a third plant in a new target market, or the acquisition of a prefabricated building manufacturer already well established in its regional or provincial market.
At the same time, Pro-Fab's management wishes to rebalance the distribution of its revenues and deliveries of manufactured buildings between the two main segments of its market: buildings for residential use and those for commercial or institutional use.
“These days, with the strength of the residential market, we make about 85% of our deliveries there, compared to only 15% in the commercial and institutional market (classroom and hospital room annexes). Eventually, we want to rebalance that to 60% in the residential market and 40% in the commercial and institutional markets,” Martin Roy explains.
An enthusiastic shareholder
At Pro-Fab's new majority shareholder, Kairos Capital, which brings together private equity capital from six Quebec business people, senior partner Marc Desmarais says, “We look forward to supporting Pro-Fab's management team in the implementation of its growth plans.”
"Our acquisition process and discussions with Pro-Fab's previous shareholder and key executives had begun in early 2020, but were delayed by the pandemic health crisis,” Desmarais tells La Presse.
“We are therefore very pleased to have been able to resume our discussions and to have recently concluded the transaction to acquire Pro-Fab. For the partners at Kairos Capital, this is our second private placement in a Quebec company after the one in the Boucherville-based telecommunications company Comprod. It is also a second milestone towards our medium-term objective of building a portfolio of private equity investments in companies with an asset value of $500 million.”
