Canadian Business Growth Fund: Marking a Significant Milestone
The last few months have been extremely busy for the Canadian Business Growth Fund (CBGF) team. Since our launch in June we have been thrilled with the positive response we have received. Our mandate to provide long-term, patient, minority capital to ambitious entrepreneurs leading mid-sized businesses has clearly resonated across the Canadian business community. We are excited that our vision has now become a reality with our first investment.
We recently closed our first investment with Lift Auto Group (Kelowna, B.C.), providing $15 million to support its strategy of consolidating the auto collision repair industry in Western Canada. In return, CBGF receives a minority ownership interest in the company and a board seat that we will use to provide strategic advice, guidance and access to our network.
As I have previously discussed, supporting the growth of Canadian small-to-medium enterprises (SMEs), like Lift, is imperative. Indeed, these companies are the true lifeblood of our economy, driving more than half of our GDP. SMEs represent 99.7 per cent of all businesses in Canada — and employ 90.3 per cent of our entire private sector labour force. Yet for too long, these enterprises have been capital-starved and have not received the guidance and mentorship required to navigate the challenges of scaling up. These are precisely the challenges the CBGF has been created to address and the growth capital gap it intends to close.
Lift currently owns and operates seven auto collision repair shops in Western Canada, including three in Kelowna, and it raised capital to execute on its growth strategy of acquiring 8-10 additional shops each year across Western Canada. The partnership between Lift and CBGF is already yielding results: Lift closed a significant acquisition in Edmonton within days of our investment, added another in Victoria four weeks later, and continues to build out a robust acquisition pipeline.
Lift is lead by Mark Reineking and Michael Schurink, who both grew up in entrepreneurial families that owned businesses in the collision repair sector. Mark and Michael, along with their team, are utilizing their experience to bring a sophisticated approach to become a leading player in a highly fragmented, and increasingly complex industry.
The strength of Lift’s team highlights a cornerstone of CBGF’s investment philosophy. We don’t just back companies, we back people. Lift’s team is ambitious and has the character, skill, and experience to achieve their vision. Strategic and cultural alignment is a priority for us, as it is for Lift. We firmly believe that sharing common values builds the foundation for strong, successful partnerships.
In fact, alignment with our values helps to drive our investment decisions:
· Integrity: We partner with companies that we trust, and who can put their trust in us.
· Excellence: We work with teams that strive to be the best they can be, and who aspire to become leaders in their industries, just as we do.
· Accountability: Our partners must be willing to be accountable for their decisions, their actions and their performance, as we are in turn, to our investors and investee companies.
· Partnership: Partnership to us means ensuring open communication to achieve common goals. We treat our investee companies as our partners, as we do our employees and investors, and we look for the same in return from our investees.
· Passion: We want our partners to believe in what they’re doing and care about what they’re trying to accomplish, because we do, and we have their interests at heart.
A primary motivation for the creation of CBGF was to provide Canadian companies with a greater opportunity to scale and become leading national and global champions, encouraging them to be bold and ambitious in the process.
Lift is an example of how we can encourage entrepreneurs to “Think Big” while accessing the capital, talent, and guidance required to take their businesses to the next level – and importantly, keep control of their companies. Lift was about to sell 70 per cent of its ownership – and raise more money than the company required – because that was the only option available. With the CBGF transaction, the Lift team raised the capital they needed, kept control of the business, and gained a long-term partner.
We are honoured to be part of the Lift team. They are off to a strong start and on their way to realizing their vision. We look forward to playing a meaningful role in helping many other Canadian mid-size companies “Think Big” in the months and years to come.