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4Refuel |
Business Description
4Refuel is the Canadian market leader and among the largest North American providers of on-site refueling and fuel management services. 4Refuel delivers diesel fuel directly to clients' vehicles and equipment on a 24/7 basis, saving customers the time, expense, and liability associated with managing their own refueling. The customer base includes a significant number of Fortune 500 companies and represents a range of industries including transportation, construction, rail, oil and gas, and marine. The Company operates primarily in Canada through corporate-owned operations in major centres and a small number of franchises in more remote areas. As part of its service offering, 4Refuel provides each client with Fuel Management Online (FMO), an industry leading and proprietary web-based application that enables clients to review detailed real-time data on refueling and consumption by vehicle, analyze price history, confirm deliveries and manage fuel budgets.
Investment Thesis
TorQuest invested in 4Refuel based on the company's strong track record of growth, leading market position, unique service offering, competitive barriers, and outstanding customer loyalty and advocacy. We have identified several avenues to accelerate the growth the business and we intend to invest significantly in these opportunities. 4Refuel is led by an exceptional management team which has partnered with us in this investment.
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Pinova |
Business Description
Pinova, Inc. is a manufacturer of specialty chemical products derived from pine trees and citrus fruit peels. Located in Brunswick, GA, in the heart of the pine forests of the southeastern U.S., Pinova produces rosin and terpene based resins that are used in a wide range of specialty applications around the world, including food and beverage, adhesive, construction and agriculture.
Investment Thesis
TorQuest acquired Pinova from Ashland Inc., one of the world's largest chemicals manufacturing and distribution companies, in January 2010. Our decision to invest in Pinova was based on the company's strong past performance, proven track record of developing innovative and industry leading products, unparalleled customer service, exceptional management team and diverse customer base that includes many leading international companies. We identified a number of opportunities to both expand the business and increase operational efficiency, and we believe that Pinova, through increased focus, flexibility and investment, is well positioned to thrive and grow as a standalone business.
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Firstonsite Restoration |
Business Description
Firstonsite Restoration, is the leading provider of disaster restoration services in Canada to residential, commercial and industrial clients. The Company is a full service restoration provider with emergency and re-build expertise in water losses, wind damage, fire and smoke damage, sewer backup, document restoration, hurricane and tornado restorations, odour control, contents handling, drying, electronic repairs, mould remediation, asbestos remediation, petroleum spills and infection control.
Firstonsite was formed in February 2007 by the merger of Edenvale Restorations and Woodhouse Contracting, two leading regional disaster restoration firms. Subsequent to the initial capitalization, Firstonsite has acquired an additional 14 regional disaster restoration firms in Canada and now operates as seven regional hubs with offices in 38 cities across all but one of the Canadian provinces. The combined entity has over 1,100 employees and over $200 million of annual revenue.
The Company's vision is build the pre-eminent disaster restoration company in Canada with coast to coast representation, a consistent service offering, internal and external consistency and a corporate sales and marketing group capable of driving national deals to the operations in the field.
Firstonsite is a true operating partnership whereby all of the vendors / founders have stayed on in their original capacity as managers and most are also owners in Firstonsite. The Company is extremely proud of its entrepreneurial and regional heritage and continues to foster this in its culture.
Investment Thesis
Firstonsite's management team has a proven track record of extraordinary growth. With the restoration industry in Canada being highly fragmented, TorQuest invested in Firstonsite to back the existing management team and add additional management talent to widen its footprint in Canada to service a customer base that is more national in scale. By expanding its geographic reach and expanding its service offering there is an opportunity to increase the value proposition to its customers.
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Herbal Magic |
Business Description
Herbal Magic is Canada's largest franchisor of commercial weight loss centers with over 330 centers across North America providing an exclusive line of herbal supplements and weight management services. Herbal Magic weight loss programs combine one-on-one counseling, grocery store foods and supplement support. Each program is tailored to meet a specific client's needs and the client is given the information and tools necessary to help them lose the weight and keep it off.
Investment Thesis
TorQuest has invested in Herbal Magic based on its strong and scalable franchise model and excellent growth trajectory. Since 2003, the current management team, which has partnered with TorQuest on this transaction, has done a formidable job of improving the business and identifying and implementing growth initiatives that will continue to pay dividends in the years to come. The business is driven by the global trend towards healthier living and capitalizes on its highly effective weight loss program and easily scalable franchise model. Herbal Magic intends to continue to open new franchises in under penetrated markets across Canada and TorQuest will support the Company with the necessary systems and marketing investments to grow the business and reinforce Herbal Magic as an established national brand.
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Associated Brands |
Business Description
Associated Brands is a leading North American manufacturer and supplier of private-label dry blend food and household products that sells to 45 of the 50 largest North American food retailers. Associated Brands' principal focus is on manufacturing dry blend food products such as flavoured drink mixes, iced tea, hot chocolate drinks, dessert mixes, soups, bouillon, side dishes and sweeteners. Associated Brands has grown to become one of the three largest suppliers of a diverse range of private-label dry-blend food products in North America, producing over eleven million cases annually.
Investment History
TorQuest's initial investment in Associated Brands was through an exchangeable debenture in November 2005, when Associated Brands was a publicly traded income fund. In May 2007, TorQuest successfully completed a going private transaction, following a board supported bid to acquire all of the operating subsidiaries of the income fund.
Investment Thesis
TorQuest has invested in Associated Brands based on its strong customer base, diverse portfolio of stable products, strong recent sales momentum, and opportunities for efficiency enhancements and related acquisitions. We believe the privatization will prove to be beneficial; as a small, underperforming public company, the Company was unable to attract the capital necessary to make efficiency enhancing investments nor related acquisitions to gain scale or scope. The Company was also burdened by substantial public company costs that given its small size represented a significant strain on cash flow. Prior to the going private transaction, TorQuest was instrumental in the hiring of a new Executive Chairman who has made, and is planning a number of significant changes that will lead to enhanced profitability.
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GCAN Insurance Company |
Business Description
GCAN is a Toronto-based commercial line property and casualty insurance company that has operated in Canada since 1956. The company was formerly the Canadian primary property and casualty operation of the German insurance conglomerate, Gerling Group.
GCAN focuses on “niche” insurance lines that require technical expertise to assess risk attributes and determine appropriate policy provisions. The company employs highly experienced underwriters, engineers and loss control experts that provide specialized insurance expertise from offices in Toronto, Montreal, Calgary and Vancouver. The company uses its underwriting and loss control expertise to build a degree of brand loyalty among brokers and insured.
Investment Thesis
GCAN’s management team has consistently grown premium volume while continuing to earn underwriting profit. The company has achieved this due to its focus on niche insurance business with no personal lines, a strong broker distribution network, and excellent direct relationships with its customers. TorQuest’s plan was to maintain management’s successful yet prudent growth strategy while assessing potential acquisitions of targeted books of business in similar lines and with similar risk profiles to the company’s current portfolio.
Investment Results
On October 7 th 2005, GCAN was sold to a large financial buyer. During the period of TorQuest’s ownership, GCAN‘s annual net income increased from $10.7 million to $19.0, while book value increased from $75.3 million to approximately $107.0 million. Under TorQuest’s leadership, the company was successfully re-branded as GCAN Insurance Company and improved its AM Best rating to “A”.
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CNC Global Ltd. |
Business Description
CNC Global is Canada’s leading provider of full-service IT staffing to a client roster that includes 33% of the companies listed on the S&P/TSX 60. Since 1981, the Company has worked with organizations across Canada to develop and implement full-service staffing strategies that improve new hire quality, streamline the recruitment process and contain the costs associated with resource management, providing advantages over resources obtained in-house or through other third-party staffing firms. The Company’s Contract Consulting and Permanent Search lines of business lead the industry, while its vendor management program provides sophistication. CNC Global now ranks 10th in Branham’s list of the country’s “Top Professional Services Companies” and was recently selected as #1 on the 10 Best Small & Medium Employers in Canada for 2004 according to the QCED and Hewitt Associates BSME study.
Investment Thesis
CNC Global's management team has been able to broaden the Company's product offering of full service IT staffing solutions and develop a technology platform which is unrivalled in the industry in terms of scalability and cost effectiveness.
TorQuest has invested in CNC Global's extraordinary management team and hopes to build on the Company's successful track record of profitable growth. Coupled with organic growth, TorQuest will work with management to complete potential strategic acquisitions in this fragmented market.
Investment Results
On May 1st, 2006, CNC Global was sold to the North American division of Vedior NV, one of the world’s largest staffing companies based in the Netherlands. During the period of TorQuest’s ownership, CNC’s annual revenues increased from C$150 million to C$260 million with profitability also increasing significantly. This was achieved through organic growth initiatives and the implementation of a strategic acquisition plan.
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DayMen Photo Marketing LP |
Business Description
DayMen Photo Marketing LP is the trademark holder of Lowepro, the worldwide leading brand of protective carrying bags and packs for imaging and electronic equipment. DayMen and its subsidiaries oversee the design, manufacturing, marketing and merchandising of Lowepro products, which are distributed through DayMen's wholly-owned operations in Canada, US, UK and Germany as well as through third party distributors in over 90 countries. In addition to Lowepro branded products, the DayMen companies distribute a number of other photographic and consumer electronic products and accessories in the imaging and photography industries.
Investment Thesis
TorQuest has invested in DayMen based on the Company’s outstanding track record of growth and the prospects for continuing on its growth trajectory. DayMen will continue to benefit from the worldwide growth in the imaging market and the growing importance of photographic accessories to retailer profitability. DayMen also has a number of identified opportunities to enter new markets. Lowepro is the leading brand in the industry and is known for its innovative designs and quality. Finally, DayMen and its subsidiaries are led by an outstanding management team, which has partnered with us on this acquisition.
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Granby Steel Tanks |
Business Description
Granby Steel Tanks is North America's leading manufacturer of high quality steel tanks for fuel oil storage used in connection with residential and light commercial oil-fired furnaces and boilers. Since 1954, the Company has built a reputation as the premier manufacturer of residential steel tanks by continually improving product quality to levels that have become the benchmark for the industry. In December 2002, TorQuest Partners purchased the Company from Carrier Corporation, a division of United Technologies.
Investment Thesis
Granby's management built its dominant market share by attracting and growing with the industry's largest distributors. There was an opportunity for Granby Steel Tanks to introduce new products into this distribution network. TorQuest's view was that Granby's distribution network was a tremendous asset. TorQuest's plan was to position Granby as an HVAC competitor and to assist Granby in acquiring companies which manufacture complementary products that Granby could introduce into its existing distribution network.
Strategic Initiatives
TorQuest led the corporate development and strategic planning roles at Granby. Under TorQuest ownership and through exceptional leadership in the Company, Granby increased revenue, increased quality and workplace safety and dramatically increased profitability through operational improvements. In February 2004, Granby closed the acquisition of Kamco Products, North America's largest manufacturer of coated copper tubing products for use in HVAC applications. The acquisition gave Granby the critical size to access the capital markets as an income trust. Furthermore, the growth potential of the coated copper tubing industry added a growth element to the Granby story.
Investment Results
On December 16th, 2004, TorQuest Value Fund L.P., through its investment in Granby Steel Tanks Limited Partnership (GSTLP), closed the initial public offering of Granby Industries Income Fund at an 11.25% yield. TorQuest retained 20% of the interest in Granby Industries Income Fund by holding Class B subordinated units.
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SCM Insurance Services |
Business Description
Founded in 1986, SCM has grown both organically and by acquisition to become Canada's largest independent national providers of outsourced services to the P&C insurance industry. From its beginnings as a regional independent adjuster in Alberta, SCM has built a network of over 120 branches coast to coast. SCM is comprised primarily of three complementary lines of business:
ClaimsPro is the largest independent provider of claims adjusting and claims management services in Canada. ClaimsPro's 500+ licensed claims professionals are retained by insurance companies, their lawyers, or self-insured corporations to investigate and bring about satisfactory resolution to insurance claims. In Quebec, SCM's claims adjusting business is branded as IndemniPro. ClaimsPro also recently expanded to the UK.
SCM Risk Management Services (RMS) provides information to assess the risks associated with insuring physical properties, including inspection and appraisal of residential and commercial buildings. The RMS division also includes iClarify, a validation and valuation service that assists insurers and brokers in accurately determining the replacement cost of insured properties.
Forensic Investigations Canada provides investigative and discreet surveillance services to insurers and corporations across Canada.
Investment Thesis
TorQuest invested in SCM based on the company's exceptional management team (who remain significantly invested in the business), strong track record of growth, excellent customer relationships, leading market position, and innovative technology platforms. We believe the company is well positioned to benefit from ongoing trends in the Canadian and international insurance industry and faces a range of organic and inorganic growth opportunities. Acquisitions will be targeted in the core adjusting sector in both Canada and the UK, as well as more broadly in the general insurance services industry. TorQuest's investment in SCM builds on prior experience in the Canadian P&C insurance space, including the Fund I investment in GCAN Insurance.
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Marsulex Inc. |
Business Description
Marsulex's business was the removal and sale of industrial by-products, mostly sulphuric acid, liquid sulphur dioxide and elemental sulphur from base metal smelters and oil refineries. In 1994 Harrowston purchased 47% of Marsulex for $13.3 million.
Investment Thesis
With the proper financial and strategic guidance, Marsulex could become a leader in the growing market for environmental services solutions.
Strategic Initiatives
Harrowston led the corporate development and strategic planning roles at Marsulex and arranged the capital needed to achieve a shift in focus from being a seller of industrial chemicals to a provider of environmental compliance services. Harrowston assisted management in developing a significant global acquisition strategy, expanding Marsulex's markets and capabilities.
Investment Results
In 1996, Marsulex completed a Toronto Stock Exchange IPO for proceeds of $52.5 million, valuing the total equity at $157 million. In 2001 Marsulex raised $167 million by creating a publicly traded income trust from a portion of its assets.
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Gustin Kramer Limited |
Business Description
Gustin Kramer Limited was a contract manufacturer and private label supplier of paper and non-woven consumer products to major retailers and branded consumer product companies. Prior to joining TorQuest, one of our partners was CEO and controlling shareholder of Gustin Kramer from 1994 until early 2002.
Investment Thesis
The goal was to turnaround this troubled, highly leveraged company by divesting the under performing divisions and expanding the business into consumable, non-food consumer products which generated higher margins and stable cash flows. By improving production processes to meet the increasingly difficult demands of its customer base and by developing new products, Gustin Kramer could become a diversified consumer product company serving the global market. As a privately held company, the goal was to maximize value while not diluting the shareholder's equity ownership.
Strategic Initiatives
Under-performing divisions and product lines were immediately sold, creating improved cash flow. The company was re-capitalized, resulting in appropriate covenants that allowed for investment in process improvement, product development and important additions to management. A management team was developed. Operating margins were improved significantly and the business doubled revenues between 1995 and 2002.
Investment Results
In 2002, a strategic buyer purchased the paper division (the company's largest division) for a substantial multiple of earnings. Proceeds flowed directly to the shareholders. By preserving equity ownership, the CEO, with a relatively small investment, earned outstanding returns.
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Fabrene Inc. |
Business Description
Fabrene was a North American manufacturer and marketer of woven polyethylene fabric. In 1994 Harrowston purchased 45.45% of Fabrene for $7 million, arranging the balance of the purchase price and debt for this acquisition.
Investment Thesis
There was an opportunity to capitalize and expand on Fabrene's strong customer base, product development opportunities and low-cost production. An original investment partner, The InterTech Group, Inc., offered excellent industry, technological and operating experience.
Strategic Initiatives
A skilled senior management team was recruited and a capital expenditure program created to achieve improvements in capacity, quality and costs. Government financing programs were utilized and a vendor take-back note was re-financed. Fabrene's marketing strategy was focused and new end use applications for its products were developed.
Investment Results
In the same year, 1994, Harrowston accepted a $17 million cash offer from a strategic buyer for its share, producing
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Harrowston Developments Corporation (HDC) |
Business Description
HDC held real estate assets through various companies, joint ventures and partnerships with a book value of $329 million and third party liabilities of $351 million at yearend 1992. At that time, HDC was in breach of many of its covenants with a variety of lenders.
Investment Thesis
HDC needed time to realize on its assets in an orderly fashion through a reorganization of its credit facilities. Most of its assets were either subject to significant additional project financing or encumbered by debt and/or a variety of joint venture agreements.
Strategic Initiatives
HDC achieved the re-zoning of a historic Vancouver office building and adjacent site to residential uses, allowing for re-development as a condominium, and the subsequent sale of the adjacent site. The Company realized on its interests in a major shopping centre developer by contributing certain assets to a public company in return for equity and by splitting the balance of the portfolio into two new entities, and then selling Harrowston's interest for cash. Most of the remaining assets were actively managed and sold to individual buyers.
Investment Results
All of HDC's bank debt, including a profit participation to the lender, was repaid, generating net cash proceeds, on a completely tax free basis, of $45 million.
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SPI Polyols, Inc. |
Business Description
SPI Polyols produced polyols - starch derivatives used in food, pharmaceuticals and oral care products. Harrowston acquired 47.5% of SPI in 1994 for an initial investment of US $6.2 million in a leveraged transaction valued at US $75 million.
Investment Thesis
The goal was to expand this orphaned division from a regional focus, into a global company. With increased capital investment, better operating efficiencies, enhanced product development and a focused strategy, SPI could become a world leader. By adding pharmaceutical applications to its confectionery base, the valuation multiple of SPI could also be increased.
Strategic Initiatives
A significant capital program resulted in immediate operating cost savings. A growth strategy based on product leadership, global expansion and operating efficiencies was created. Significant acquisitions added international scope and scale to the business.
Investment Results
In 1998, a strategic buyer purchased the business for $331 million. Harrowston's share, after debt payments, was over $86 million for a gross IRR of more than 73%.
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Global Traffic Technologies |
Business Description
Global Traffic Technologies, which will be headquartered in the St. Paul / Minneapolis area of Minnesota, is a worldwide leader in traffic signal priority control systems and traffic detection systems. The traffic signal priority control systems, which are marketed under the Opticom® name, are hardware and software systems that grant priority to emergency response and transit vehicles approaching a traffic intersection. The traffic detection systems, which are marketed under the Canoga® name, are used for a variety of applications including freeway traffic monitoring and analysis.
Investment Thesis
TorQuest has invested in Global Traffic Technologies based on the company's stable and strong track record of earnings, its dominant market position, and the meaningful barriers to entry that exist in its industry. TorQuest also believes there are a number of opportunities that exist for the business as a stand-alone company and TorQuest is committed to investing significantly in those opportunities.
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