Goodfood will use funds from offering to grow company
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Goodfood Market Corp
July 20, Montreal, Que. – Online grocery company Goodfood Market Corp. has entered into an agreement with a syndicate of underwriters for funds that will be used to propel the company in its next phase of growth.
The syndicate, co-led by Desjardins Capital Markets and Stifel GMP, has agreed to buy 4,135,000 common shares of the company and also purchase 1,653,000 shares from executives and directors for gross proceeds of about $25 million to the company and $10 million to the shareholders.
There is also an option in the deal for the purchase of more shares that could bring the total gross proceeds to about $40.25 million.
The company intends to use the net proceeds from the offering to fund capital and operational projects to build out same-day delivery capabilities through fulfilment technology and automation equipment and for general corporate purposes.
The offering is expected to close on or about Aug. 5, 2020 and is subject to corporate and regulatory approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities.
“The accelerating adoption of online grocery and home meal solutions has brought forward Goodfood’s growth and profitability plan and this capital raised will support our continued push for growth and bolster the efficiency and breadth of our operations,” said Jonathan Ferrari, chairman and chief executive officer of Goodfood.
“This initiative will not only set up our next phase of growth and penetration by providing added flexibility to our members, but also help further improve our margin profile as we aim to have among the lowest-cost fulfillment in the country. We are in an ideal position to capitalize on the seismic e-commerce shift in the food and grocery industry and this transaction will be pivotal in enabling Goodfood’s future as the number one online grocer.”
Goodfood has a production facility and administrative offices in Montreal, two production facilities in the Greater Toronto Area, two production facilities in Calgary and Vancouver, and a breakfast facility in Montreal. Goodfood has 272,000 active subscribers.