McCain-Sobey private equity firm scoops crane company in first deal
Published Tuesday, November 20, 2012 11:16AM AST
HALIFAX -- A private equity firm launched this year by two well-known Atlantic Canadian business families has scooped up a crane company in its first deal.
Rob Normandeau, chief executive of SeaFort Capital Inc., said the firm closed a deal Monday to buy A.W. Leil Holdings Ltd. of New Glasgow, N.S., for an undisclosed amount.
SeaFort Capital was set up in late March by the Sobey and McCain families with the aim of purchasing companies established in fields such as manufacturing and heavy equipment in smaller Canadian centres.
Normandeau said the construction equipment company created in 1958 by Al Leil was a good fit with the investment firm's goal of acquiring profitable family-run operations whose owners are retiring.
A.W. Leil Holdings operates about 50 cranes under trade names of A.W. Leil, Sagadore Cranes and Cape Breton Cranes.
Normandeau said SeaFort Capital provided the owner with a succession plan that allows him to sell for a good price while knowing his company will keep its head office in Nova Scotia.
He said SeaFort Capital will keep injecting capital into its acquisition with the intention of gradual expanding into new markets in Western Canada, Ontario and Newfoundland and Labrador.
SeaFort Capital will continue purchasing businesses that are "a bit too small" to interest Canada's largest private equity firms at a rate of two or three per year until eight to 10 investments are completed, Normandeau added.
"One of the challenges that people who own businesses of this size have is liquidity," said Normandeau.
"If you've got a good business that is too large for the management team to buy, but too small to attract the attention of the largest private equity firms in Canada, it can be a challenge."
SeaFort Capital invests in Canadian companies with earnings of between $2 million and $10 million. Its board of directors include Scott McCain, a senior executive at Maple Leaf Foods (TSX:MFI).
He is joined by Donald Sobey, who helped build the Sobeys Inc. (TSX:SBY) grocery chain, and his son Rob Sobey, who sits on the Sobeys board of directors and is the chief executive of Lawton's Drug Stores Ltd.