Corporate Finance in Atlantic Canada

Commentary on corporate finance issues for small- & mid-market private companies in Atlantic Canada

Archive for November 2012

New CFIB succession survey … and my thoughts

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http://www.cfib-fcei.ca/english/article/4640-passing-on-the-business-to-the-next-generation.html

The 2008-2009 recession prompted some baby boomer entrepreneurs to delay their retirement plans and stay in business longer than they had anticipated.  That’s according to a new report, Passing on the Business to the Next Generation based on survey data from the Canadian Federation of Independent Business (CFIB).  48% of SME business owners said they intend to exit the business in the next 5 years.

Now, surveys like this are not new … I remember seeing one in the early 90s basically saying the same things (no formal succession plan in place, need to sell the business to finance retirement in the next 5-10 years, etc).  However, this new CFIB one was done after the economic ‘dip’ in 2008-09, so it is relevant to consider.

In my own experience, the recent recession did cause a pause in entrepreneurial succession plans, but not only for the reasons identified in the survey.  The volatility in the public stock markets and concerns as to where to invest the sale proceeds have been real issues delaying some succession, in my experience.  Some entrepreneurs understand the returns they can achieve in their business, but are concerned when the stock markets overall in the last decade have failed to achieve even modest returns.

In addition, one of the challenges for small business owners is value/price — if the business is in an industry where there is no large strategic buyer consolidating and paying premium prices, many small businesses are valued by the local marketplace at 2-3 times cash flow, and this can be surprising to many entrepreneurs.  This surprise can mean some entrepreneurs believe they cannot ‘afford’ to sell yet.

Written by Dan Jennings

November 28, 2012 at 11:22 am

SeaFort’s first deal

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http://thechronicleherald.ca/business/182620-seafort-buys-crane-rental-business

Halifax-based SeaFort Capital is buying New Glasgow, NS-based AW Leil Cranes, including some equity participation by existing senior management.  Leil is a mobile heavy equipment rental operator, with business across the region.

This is the first transaction announced by SeaFort, a private equity fund backed primarily by the Sobey and McCain families.  SeaFort has previously announced that they are searching for “old economy” businesses with EBITDA between $2-10 mil.

Written by Dan Jennings

November 20, 2012 at 9:40 am

Amherst Insurance sold

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http://www.cumberlandnewsnow.com/Business/2012-10-22/article-3104640/Amherst-Insurance-sold/1

http://www.amherstinsurance.net/

Amherst Insurance Agencies, a P&C insurance broker with both commercial and personal lines throughout northern NS and Moncton, NB, has sold to Johnson Inc, the national broker based in St. John’s, NL that is itself owned by RSA Insurance (the large insurer in Canada and UK, also known as Royal & Sunalliance).

Still more consolidation in the insurance broker industry (see numerous earlier posts) …

Written by Dan Jennings

November 7, 2012 at 4:31 pm

Another commercial insurance broker sells

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http://www.financialpost.com/markets/news/International+Acquires+Huestis+Commercial+Insurance/7498173/story.html

Chicago-based Hub International has acquired Saint John-based Huestis Commercial Insurance (separate from the Huestis personal lines broker throughout NS & NB).

Still more consolidation in the P&C insurance broker industry (see my earlier posts) …

Written by Dan Jennings

November 6, 2012 at 7:01 pm

Ricoh deal

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http://www.thechronicleherald.ca/business/160410-hrm-firm-acquires-ricoh-s-maritime-base

Dartmouth’s Office Interiors has acquired the copier/printer client portfolio of Ricoh in the Maritimes (excluding Halifax and Moncton).  Already a long-time Ricoh dealer, Office Interiors says this gives them hundreds of new clients.

Written by Dan Jennings

November 3, 2012 at 7:08 am

Posted in Announced Transactions

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Apartment buildings deal

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http://www.thechronicleherald.ca/business/159317-atlantic-living-growth-plans-on-track

Atlantic Living Property Management Services Inc of Dartmouth announced the acquisition of 732 rental apartment units in Dartmouth, Fredericton and Saint John.  The company says it specializes in renovating and operating rental units is “less desirable areas”.

Another sign of the phenomenal demand for real estate across Atlantic Canada …

Written by Dan Jennings

November 2, 2012 at 2:14 am

Posted in Announced Transactions

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