CFI Member CCC regongized by Canadian Dealmakers with 2009 Private Equity Mid-Market Award
April 14, 2010
CCC was recognized for advising Edenvale Restoration Specialists in the sale of their business. As a result of that transaction, Edenvale became the cornerstone of what is now FirstOnSite Restoration, Canada’s largest independent disaster restoration company owned by Torquest Partners. For us at CCC, the real prize is the value created for our clients.
Edenvale, a leading B.C. based disaster restoration company retained CCC to sell the business. It became obvious quickly that a simple exit which met the shareholders’ objectives would not be difficult. For CCC this would have meant a happy client and an easy fee. It was also clear to us that the easy answer was not necessarily the best answer. CCC’s knowledge suggested that there might be a much bigger opportunity for Edenvale. One of the benefits of 30 years of experience is knowing what questions to ask. In this case, our question was: “If you were ten years younger and had all the capital you needed, what would you do?”
Edenvale’s answer was that they would find a partner in the east and begin consolidating the industry between Ontario and British Columbia. Our team went to work modelling a potential roll-up of existing competitors in different geographies. The modelling was complex and labour intensive. This exploration posed no risk for our clients, for whom the easy transaction was always possible, but for CCC it represented a significant potential cost.
CCC contacted Woodhouse Contracting, an Ontario-based competitor and shared the model with them. Although Woodhouse had no desire to sell, the potential value was so compelling, they agreed to participate in a transaction. CCC then entered into discussions with selected roll-up candidates across the country and confirmed their interest in the proposed scenario. Working closely with Edenvale and Woodhouse, CCC developed a comprehensive roll-up plan.
The plan pointed to a significant opportunity for a private equity investor. Our intimate knowledge of the private equity market allowed us to effectively target the most likely investors with a very persuasive package.
The result was a bidding war among a group of private equity funds to purchase Edenvale and Woodhouse as the first step in the larger roll-up strategy. Torquest Partners was the successful bidder. In the time since the initial transaction closed, sales have more than tripled and Torquest has completed 14 more roll-up acquisitions. Most importantly, the net proceeds for our clients were approximately 50% over the initial valuation of either Edenvale or Woodhouse individually.