During his passage at the Chamber on February 14, St-Hubert Group President Pierre Rivard explained how Cara’s acquisition of the company contributed to its success and development.
In March 2016, the announcement of the acquisition of the flagship Quebec company by Cara Operations Ltd. caused a ripple of shock. Why sell when everything seemed to be doing well?
Here are three things to take away from St-Hubert’s experience.
Conquering new markets
The desire to ensure company growth is a good reason to think about partnering with a bigger company. With technological advances and new approaches to business, several SMEs are having difficulty securing growth outside of local markets. The partnership with Cara has allowed St-Hubert to open branches in Ontario and New Brunswick, computerize its network and increase the number and types of services offered online. Since the merger with Cara, Rivard says he is satisfied with the company’s development and is keeping his focus on two goals: longevity and growth.
Contrary to popular belief, selling a company does not equate to poor financial health. In highly competitive industries such as the food service industry where the survival rate is 29% after five years, using one’s assets and expertise by joining together with one of the big players can be a winning strategy. This is how Cara was able to break into the Quebec Market—thanks to St-Hubert, who in return knew how to showcase its expertise and profound knowledge of the local market.
St-Hubert knew how to prove itself and gain Cara’s trust. Currently, Cara has left the mandate of managing, marketing and expanding the Harvey’s chain throughout Quebec in the hands of the Quebec company. Who would have thought this was possible a year ago?
"In Quebec, it’s unusual to have [a subsidiary] with its own responsibilities. The people of Quebec have different customs, so Cara is using our success and the expertise of the team in place to ensure the company’s growth."
Developing an activity diversification strategy is another good reason to sell. In St-Hubert’s case, the company was looking to diversify its sales activities and enter the retail market. Its alliance with Cara has allowed it not only to diversify its range of activities (food service, catering, retail, food production) but also to significantly increase its profitability. Today, the company offers over 130 varieties of food products in grocery stores and is getting ready to embark in the fast food industry.
"St-Hubert Express paired with Harvey’s gives us the opportunity to enter small markets where we wouldn’t otherwise be able to enter."
In business, you need to be daring! Acquisition can be a bold choice to ensure the growth and survival of your company. The success of this strategy relies above all on the buyer with which you do business. You need to join together with a strong ally, who will know how to recognize your expertise to open doors for you to new opportunities. At least, that’s what St-Hubert’s experience demonstrates.