Press Releases


SEB and the Co-Operators announce $20 millions Strategic Financing Agreement

November 16, 2020 – Mississauga, ON

Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) a leader in benefits processing solutions and services, and The Co-operators Group Ltd., a Canadian insurance and financial services co-operative, today announced the signing of a definitive debenture purchase agreement for the issuance of a $20,000,000 convertible debenture (the “Debenture”) by way of a non-brokered private placement (the “Financing”).  The Financing solidifies SEB’s balance sheets and provides the capital to focus on numerous growth opportunities.    


The Financing will be provided by Co-operators Financial Services Limited (“The Co-operators”).  The proceeds of the Financing will be used to repay term indebtedness of the Company as well as for general working capital purposes. 


Closing of the Financing is subject to customary closing conditions, final approval from the TSX Venture Exchange (the “Exchange”) and approval from the Company’s shareholders.


States John McKimm, President, CEO, CIO of Smart Employee Benefits Inc.:  “To take advantage of its many business opportunities, SEB initiated the process to find a strategic investment partner in mid 2019. Scotia Capital was engaged to review strategic alternatives. The process has culminated with a financing agreement with The Co-operators who brings both capital and strategic partnership value. The Co-operators appreciates the strategic fit between SEB’s Technology Division and Benefit Division and the competitive advantage this gives SEB in creating value for its clients and winning new business. The management and Board of SEB believe The Co-operators represents the optimal value for SEB shareholders near term and long term; as SEB continues its product innovation, adding powerful new features that enhance our value proposition to customers and partners.


“The Co-operators Group Ltd., through its subsidiaries, is one of the leading Canadian owned multi-line insurers, offering auto, home, life, health, group benefits, farm, travel, and business insurance as well as investments. It is owned by 45 member organizations including co-ops, credit unions and representatives from farm organizations. Its asset base is over $51.0 billion with operations across Canada. Its 45 member organizations serve over 5.8 million individual members. SEB group benefit clients already include one of The Co-operators Group Ltd.’s  member organizations.”


States Alec Blundell, Executive Vice-president of The Co-operators Group Ltd.: “The Co-operators has identified the group benefit and life insurance market as a strategic high growth opportunity, and believes SEB can play a material role in expediting our growth in this marketplace. This investment supports our ongoing strategic efforts to meet the diverse needs of Canadian employers and their workforces. SEB is a leading provider of technology solutions to the group benefit and life insurance industry in Canada, with a proven suite of solutions that manage benefit plans for over 300,000 employees for both corporate and government clients, including over 50 of Canada’s leading national organizations.” 



The Debenture has an interest rate of 10% per annum, paid semi-annually with the first interest payment due on February 28, 2021, and the principal payment due at the maturity date (the “Maturity Date”), being 60 months after the closing (the “Closing Date”).  The interest rate may be reduced to a floor of 7% depending on the success of select business initiatives.


The principal amount of the Debenture is convertible into common shares of the Company (“Shares”) at a conversion price of $0.25 per Share, subject to adjustment (the “Conversion Price”). The Debenture is convertible at the option of the holder, at any time prior to the close of business on the last business day immediately preceding the Maturity Date. If the volume weighted average trading price of the Shares on the Exchange is equal to at least 175% of the Conversion Price for a period of 30 trading consecutive days, then the Debenture will be convertible at the option of the Company.


The Debenture and any Shares issued upon its conversion are subject to a hold period expiring four months and one day after the Closing Date. 

The Debenture will be guaranteed by the material subsidiaries of the Company (the “Guarantors”) and secured by a first ranking pledge of the shares of SEB Administrative Services Inc. (“SEB Admin”), a wholly-owned subsidiary of the Company, and first ranking security over the software owned by SEB Admin, and second ranking security over all other undertaking, property and assets of the Company and of each Guarantor which such security is subject only to a first ranking security over such security in favour of an operating facility lender.  The Company, The Co-operators and such operating facility lender will enter into an intercreditor agreement governing, among other things, the priority of the first and second ranking security and the relationship of Cooperators and the operating facility lender with the Company and vis a vis each other.

The Debenture is not redeemable at the option of the Company on or before June 1, 2023 (the “Call Date”). After the Call Date and prior to June 1, 2024, the Debenture may be redeemed in whole or in part from time to time at the option of the Company, at a price equal to the then outstanding principal amount plus accrued and unpaid interest thereon up to but excluding the date of redemption, provided that the volume weighted average trading price of the Shares on the Exchange during the 30 consecutive trading days preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price. Provided, however, that if the Company delivers such written notice of redemption, The Co-operators shall have 10 days to convert the principal amount of the Debenture, or any part thereof, into that number of Shares as are equal to the principal amount of such Debenture, or any part thereof, divided by the Conversion Price. After June 1, 2024, the Debenture will be redeemable at the Company’s option at any time at an amount equal to the then outstanding principal amount of the Debenture plus accrued and unpaid interest (provided, however, that the same 10-day notice shall apply to allow for the conversion at the option of The Co-operators).

On a change of control of the Company (a “Change of Control”), the Company shall notify The Co-operators of the Change of Control in writing, and The Co-operators shall, in its sole discretion, have the right to require the Company to, either: (i) purchase the Debenture, in whole or in part, at a price equal to (a) 125% of the principal amount thereof plus unpaid interest, if the notice of change of control is delivered on or prior to the second anniversary of the issue date or (b) 101% of the principal amount thereof plus unpaid interest, if the notice of change of control is delivered following the second anniversary of the issue date; or (ii) convert the Debenture, in whole or in part, at the Conversion Price.

The Debenture contains affirmative covenants, negative covenants and financial covenants that are customary for transactions of this nature.

Pursuant to an investor rights agreement between SEB and The Co-operators, The Co-operators has the right to have up to two nominees appointed to the board of directors of the Company, including one member on each of the audit committee and the governance and compensation committee of the Company. The Co-operators are entitled to nominate a third director of the Company upon conversion of the debenture to equity. The Co-operators also has the right to license the Company’s technology and intellectual property on commercial terms.


The policies of the Exchange require that any new Control Person (as defined under Exchange policies e.g. a holder of more than 20% of the outstanding voting shares of an issuer) requires Exchange approval and shareholder approval.  Exchange policies also provide that shareholder approval may be obtained by written shareholder consent. 

There are currently 165,760,699 Shares issued and outstanding.  The Co-operators currently does not own or control any Shares; however, if The Co-operators were to convert the principal amount of the Debenture, then The Co-operators would beneficially own or control, directly or indirectly, 80,000,000 Shares, representing approximately 32.6% of the then 245,760,699 issued and outstanding Shares. 

The Company has obtained conditional approval from the Exchange and will seek to obtain the written consent of holders of a majority of the Shares for the Financing and creation of The Co-operators as a new Control Person.  The Company is targeting to close the Financing on or before November 30, 2020, coincident with final Exchange approval of the Financing and the closing of the Company’s new operating credit facility.


Scotiabank is acting as financial advisor to SEB and Harris + Harris LLP is acting as legal counsel to SEB.  Fasken Martineau DuMoulin LLP is acting as counsel to The Cooperators.


SEB is a technology company providing Business Process Automation and Outsourcing software, solutions and services to a national and global client base. SEB has a specialty growth focus in cloud enabled processing solutions for managing employer and government sponsored health benefit plans on a BPO (Business Processing Outsourcing) business model, globally (through wholly owned SEB Administrative Services Inc.). SEB currently serves corporate and government clients across Canada and internationally. Over 80% of SEB’s revenues derive from government, insurance and health care organizations. SEB’s technology infrastructure of over 650 multi-certified technical professionals, across Canada and globally, is a critical competitive advantage in supporting the implementation and management of SEB’s benefits processing solutions into client environments. SEB’s Benefits Processing Solutions can be game changing for SEB clients.


The core expertise of SEB is automating and managing business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s client acquisition model in benefits processing is “Channel Partnerships” where SEB processing solutions both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered on a SaaS platform. SEB solutions turn cost centers to profit centers for our Channel Partners.



SEB Admin’s FlexPlus processing environment encompasses over 20 benefit processing modules driving more than 20 revenue models. The modules can operate standalone or as a single sign-on fully integrated environment. A number of the modules are unique in the marketplace. All FlexPlus modules are cloud enabled, can be provided in French and English, and can be cost-effectively customized for multiple languages applicable to both Canadian and international markets. SEB’s “Channel Partner White-Label” business model is unique in the Canadian market. Channel Partners include insurance brokers, benefit consultants, MGAs, TPAs, Insurers, plan sponsors, corporate, government entities, unions, insurers and payroll companies. FlexPlus turns “cost centres” to “profit centres” for Channel Partners. All FlexPlus solutions can be deployed in multiple environments and delivered as a fully outsourced, co-sourced or SaaS model. FlexPlus solutions are applicable to all benefit plan types including Flex Cafeteria, traditional, multi-employer and hour bank/dollar bank plan designs.


For further information about SEB Administrative Services Inc., please visit



The Co-operators Group Limited is a Canadian co-operative with more than $51.4 billion in assets under administration. Through its group of companies, it offers home, auto, life, group, travel, commercial and farm insurance, as well as investment products. The Co-operators is well known for its community involvement and its commitment to sustainability. The Co-operators is ranked as a Corporate Knights' Best 50 Corporate Citizen in Canada and listed among the Best Employers in Canada by Kincentric (formerly AON). For more information, visit



The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope”, “target” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.


Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company's control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.


Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein in the United States.  The securities described in this news release have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


For further information about SEB, please visit


All figures are in Canadian dollars unless otherwise stated.



John McKimm, President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817


Media relations

The Co-operators