Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

December 26, 2011

Every family business should know this story


'A significant investment' in Ontario manufacturing - here is the quick story about how a Canadian 4th generation business grew beyond the family's wildest dreams.
Hamilton, Ont.-based Bermingham Foundation Solutions Ltd. has secured "a significant investment" says chairman and fourth-generation owner Patrick Bermingham.
Its new strategic partner, Soletanche Freyssinet, is part of the VINCI group, a Paris-based, publicly traded company that employs 180,000 people in about 100 countries.
Bermingham, founded in 1897, is Canada’s oldest foundation and marine specialty contractor, with a focus on the transportation, energy and mining markets. It also manufactures specialty foundation equipment and provides engineering services under the trade name Berminghammer. It currently exports equipment and services to more than 40 countries. Bermingham’s senior management will continue to run the business and remain shareholders.
How did a company with about 150 employees attract such a large foreign investor? 
Five years ago, Bermingham met Loewen and Partners who taught them about the benefits of private equity for companies under $100M. As a family business, Bermingham had slowed down its growth by relying purely on the banks. As a client for 110 years, Bermingham's bank gave good loans but not enough to grow the company at a quicker pace. Higher growth is tricky and much higher risk which puts it outside the bank's comfort zone. Private equity may have a poor reputation but so do banks. Yet, smart family business owners who have achieved considerable wealth educate themselves about why these different types of finance do have a good achievement rate. Staples, Facebook, Google and Caterpillar have all achieved their success with private equity underpinning.
Putting aside their fears, Bermingham used Loewen and Partners to build up their valuation case and brought in a private equity investor that allowed the company to recapitalize its balance sheet and build out its strategy. Bermingham subsequently repurchased 100 per cent of the business, returning the company to the family and employee ownership. Toronto-based investment banking firm Loewen & Partners, which advised the company in the private equity transaction and the VINCI one, says strong processes and reporting structure subsequently made it easy for a large firm to do its due diligence.
Backed by Soletanche Freyssinet, Bermingham now has a mandate to grow. It intends to expand its overseas operations with increased equipment sales and rentals, and enter into joint-ventures on large scale projects at home and around the world.
Bermingham's long history of innovation over multiple generations of family ownership, and the fact it has achieved continued success in manufacturing - an industry long considered on the wane in Ontario - makes this announcement significant on a number of fronts.
Read the full story at The Globe and Mail by one of my favourite business reporters, Sean Stanleigh

No comments: