Sale sets up retirement for builders
Company makes portable accommodation
Two Calgary entrepreneurs who have been providing rig workers with a desk and a bunk on well sites across Alberta for 35 years have found an exit strategy thanks to a Toronto private equity fund.
Signal Hill Equity Partners announced this week it is buying into C&V Portable Accommodations Ltd., a company that builds, sells and rents mobile buildings for oil and gas well site accommodations, remote offices and dedicated geology/ engineering labs.
Chief executive Tim Vermaat — the “V” in C&V — said in an interview he and partner Rene Cramer founded the company in 1977 and have survived three decades of boom and bust cycles along with the rest of the oil and gas service sector.
But time moves on and, about five years ago, they began exploring options that will allow them to cash out.
“It’s the aging of the original equity owners, the people who started this,” explained Vermaat, 64, who will stay on with an ownership stake for a few more years while Cramer, 70, retires right away.
Several other managers are also taking equity interests in the company.
“We’re very happy with the deal,” Vermaat said.
“I’m honoured they asked me to stay on and operate the company as it exists and as it has grown over the past 35 years.
“That’s very exciting for me to deliver something in someone else’s hands and they see the value in something we’ve created.”
Jamie Johnson, Signal Hill’s managing partner, said C&V fits the equity fund’s strategy of partnering with managers from mid-market companies, noting it has completed over 100 transactions, including many with oil and gas service firms.
“We bought in with the view to invest more capital and grow the company,” he said, adding that could mean expanding its Calgary manufacturing shop or building a new facility.
“This is not an investment where we’ve come in to try to fix it. We think this is an extremely well-managed, profitable business.”
He added the fund will eventually want to exit C&V so that investors can collect their returns but there is no set timeline on that event.
Vermaat said the company grew quickly after being formed in the late ’70s and soon had more than 30 employees. “That was an upturn, in ’77, ’78, ’79. Then in 1980, as you might recall, our friends from Ottawa had the National Energy Program come out and they turned off the tap and from our height of 33 people, we went back to about four,” he said.
The company has grown slowly since then.
It now generates about $16 million in annual sales and has 65 employees, with 45 in the manufacturing centre in southeast Calgary and about 20 at a depot in Grande Prairie, from which it serves northeastern B.C. plays like the Horn River Basin.
Vermaat said the business has evolved over the years, with the most obvious change being the size of standard portable unit, from 10 by 28 feet to 14 by 62 feet, a difference of nearly 600 square feet.
“When we first started renting out, there were no microwave ovens,” he recalled. “We had some TVS but the TVS were an extra charge and then we also rented the antennas extra as well because they were often damaged.”
Modern standard large units provide two offices with equipment to monitor the well and two well-appointed apartments — complete with four big-screen TV sets.