The rise of Britco Group is a classic tale of rags-to-riches entrepreneurship, and the sale of the company this year to WesternOne Equity Income Fund (WEQ.UN) for $93 million ranks it among the biggest deals in British Columbia.
The company has just received the ACG Vancouver and Business in Vancouver Dealmaker Award for 2011.
CEO Rick McClymont recalls the modest start of Britco in January of 1977 with partner and co-founder and president David Taft, who had worked with hime at Chimo Homes, a manufactured-home builder.
?I had a few friends who were criminal lawyers and they let us use a small storage room in the back of their offices,? McClymont, now 65, said. ?David and I had one table and one telephone.?
McClymont and Taft had spotted an opportunity in providing workforce housing for the construction industry and for the oil and gas fields of northern B.C. and Alberta. In short order they had hired six staff and opened a 10,000-square-foot factory in Langley.
Back then, both partners often worked right in the plant, and McClymont used to haul pieces of dimension lumber by sliding them through the sunroof of his 1972 Pontiac Firebird. In that first year, the company posted revenues of $480,000, which included the sale of their first structure to a client in the Yukon.
Today, the orange and white Britco construction and staff trailers are as common as snow across the north, but the company has become as well known for their high-end modular structures in southern B.C., including the PNE prize home in Vancouver, which they have provided for 11 years and will again for 2012.
Other projects have included the award-winning 2010 Winter Olympics athletes lodge in Whistler, B.C., multi-storey hotels, health clinics and offices, golf driving ranges and retail outlets, part of the Canadian embassy in Beijing, plus warehouses and manufacturing plants for blue-chip industrial clients across B.C.
Today, Langley-based Britco has production plants in Penticton and Agassiz, a manufacturing facility in Waco, Texas, approximately 400 employees and annual international sales of around $80 million.
Over the past decades, Britco has captured a number of honours. As well as being named an official supplier to the 2010 Vancouver Olympics and Paralympic Winter Games and the Canadian Olympic Team, the company has won the BC Export Award for its projects in Russia and Indonesia and the Ernest & Young Entrepreneur of the Year Award for the best manufacturing company in Western Canada.
In 2009, both McClymont and Taft were inducted into the international Modular Building Institute?s Hall of Fame.
?Britco is one of the largest manufacturers of modular buildings in North America,? said Ken Tarry, capital connection chair, Ernst & Young, Vancouver, who stickhandled the sale to WesternOne.
?It is one of the most remarkable success stories in B.C. history.? Tarry said McClymont and Taft represent an ?inspiring lesson? in entrepreneurship and leadership for the province.
McClymont said the offer from WesternOne came ?out of the blue? in November of 2010 and he and Taft spent the next few months in discussion with WesternOne before the unsolicited offer was finalized in June.
The deal will provide the capital that Britco needs to expand in Western Canada?s resource sector, where McClymont clearly sees future growth. Already, Britco has the largest lease fleet of temporary offices, construction site trailers and storage containers in B.C.
?There is huge demand for workforce housing in the Alberta oilpatch and I see that continuing for quite a few more years,? McClymont said.
The two founders will stay on to assure a smooth transition of the company, he said, and remain available as consultants.
?We developed a pretty damn good management team, which I think WesternOne appreciates,? said McClymont, who is building a retirement home in Sechelt.
Britco easily filled the checklist WesternOne uses to target acquisitions. This include companies that are focused on Western Canada, have a history of stable cash flow, strong potential growth, a strong market-share position and a committed management team.
?We are delighted to complete the [the acquisition of Britco], which we believe is highly complementary to WesternOne?s existing business operations,? said Darren Latoski, CEO of WesternOne Equity. ?It enhances WesternOne?s product and servicing offering and further positions us as an integrated construction and infrastructure-services provider.?
WesternOne arranged $75 million in debenture financing to support the purchase of both Britco Structures LLP and Britco Leasing Ltd. in a bought deal underwritten by a syndicate that was co-led by Dundee Securities Ltd. and National Bank Financial, and includes Canaccord Genuity Corp., CIBC World Markets Inc., HSBC Securities Canada Inc., Macquarie Capital Markets Canada, Union Securities and M Partners Inc. ?
