Industries Served

Energy, Environment & Natural Resources

Wholesale Trade and Manufacturing

  • Petroleum Refining
  • Coal Mining
  • Sand & Gravel Mining
  • Metals Mining
  • Oil & Gas Field Services and Extraction

Utilities

  • Electric Power Transmission
  • Natural Gas Distribution
  • Renewable Power 
  • Thermal Power

Beacon has previously advised businesses in the energy, environmental and natural resources space.

Mandate

Beacon was engaged by a manufacturer of plastics and acrylic fabrication with in-house vacuum forming and CNC capabilities. The business owned one of the largest forming ovens in the GTA. Through 30 years of industry experience, the business had developed a strong brand reputation among suppliers and customers in the industry. The owner of the business at the time was seeking an early retirement due to medical reasons. Due to Beacon’s strong presence in Ontario and experience working related manufacturing businesses, Beacon was chosen as the exclusive broker and provided sell-side transaction advisory services through the entire sale process.

Implementation

Beacon began by compiling a fairness opinion to determine the business’ true fair market value and proceeded to compile deliverables and confidentially market the mandate to potential buyers. The business had invested in state-of-the-art equipment and machinery, giving it exceptional in-house manufacturing capabilities. Due to the owner’s health and condition, it was crucial that the transfer of ownership take place as soon as possible. Beacon realized the urgency of the situation and allocated a large portion of its resources to this mandate, making it a priority. Through our large network of buyers and industry professionals, we were able to attract several buyers for the business. Based on the seller’s criteria and vision, as well as our financial acumen, we were able to pre-screen buyers and solicit offers from serious buyers.

Outcome

Beacon’s team assisted our client through every step of the sale process, and successfully completed the transaction. Beacon effectively negotiated an asset transaction with a private buyer. The deal was structured as an all cash transaction with no vendor take back allowing our client to completely exit the business. Through active involvement in the due diligence process and proactive communication with the buyer, we were able to close the deal within the stipulated period of time. A one month training and transition period was negotiated. In addition, Beacon made sure that the business was prepared for the successor to maintain smooth operations through the transition period without damaging value.

Industry Overview

The energy industry includes all refining, mining and distribution of oil, petroleum, and gas, as well as the transmission of renewable, thermal and electrical power. Factors such as economics, infrastructure, and societal preferences influence the production, transportation, and consumption of energy in Canada. The key energy trade sectors present between Canada and the US are the trade of crude oil, natural gas, uranium, petroleum products, electricity and coal. Canada is the sixth largest producer, the fifth largest net exporter and the eighth largest consumer of energy globally, with the energy sector accounting for 11% of nominal GDP in 2017. Canada is a significant net exporter of crude oil, with almost all of it received by the US, with approximately 3% received by Europe and Asia. Due to the regional nature of Canadian refineries, Atlantic Canada imports crude oil from the US rather than utilizing Canadian product. The manufacturers in this industry follow a B2B model, with buyers being refineries, national and international commodity companies, distribution companies, traders, or whole countries. The suppliers are large international companies, a key one being OPEC, who have 70% of the world’s oil proven reserves, possessing a significantly greater bargaining power than buyers. The industry is currently in its mature stage and is highly regulated and manufacturers must comply with quality and pricing standards. Being a highly globalized industry, trade regulations play an influential role. The industry is primarily driven by the global energy benchmarks of each respective commodity, trade tariffs and overall demand. A weaker currency increases the demand for exports of energy products, whereas a stronger currency increases the demand for imports.
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