Pender West Capital Partners

About

Pender West Capital Partners Inc. is a family office that invests its private capital in small to medium sized companies. Since 2000, we have been partnering with entrepreneurs and management teams to build our portfolio companies over the long term. With an office in Vancouver, British Columbia, and Toronto, Ontario we look for investments in companies located across Canada and Western United States.
 
Typical Investments
We target mature companies with exceptional management teams and excellent growth opportunities. Typical investments include private owners interested in selling or recapitalizing closely held businesses and non-strategic business divestitures from private or public corporations.
 
Partnership Philosophy
Pender West is a financial investor with a partnership approach to building constructive and supportive relationships with owners and management teams. The partners of Pender West collectively have over 100 years of operating, financial, and strategic corporate development expertise; however, we will only invest in companies where we can partner with and develop a strong working relationship with management.
 
Alignment of Interests
Pender West's investment philosophy is based on creating partnerships with management and aligning our interests toward shared goals and a commitment to succeed together over the long term. Typically this involves facilitating meaningful management ownership either through direct management investment, or as circumstances require, ownership earn-in. Each of the partners of Pender West has a significant personal investment in our acquisitions ensuring management of our unwavering commitment.
 
Longer-Term Investment Horizons
Unlike many private equity firms, we do not have external investors, and we do not manage institutional capital. We manage truly private, family-backed capital and thus have a more flexible investment period timeline. At Pender West, we are committed to creating value over the long term - 5 to 15 years plus.
 
Our Value-Add
We are active, strategic investors looking for ways to assist management in the company’s growth and to build value over the long term. We seek to add value to our portfolio companies as follows:
 
1. Be a sophisticated partner & team player  
To build a constructive partnership based on integrity, open communication, ambition to grow & mutual respect.
2. Provide operating autonomy 
To be value focused and contribute where we can. We are not day-to-day operators as we recognize the talents and experience of our management teams.
3. Provide strategic input 
To share our over 100 collective years of operating, financial, and strategic corporate development expertise.
4. Assist on special projects 
To assist in executing the strategic plan, growth initiatives, and special projects.
5. Generate M&A deal flow 
To source and assist with potential acquisitions.
6. Provide financial resources and structuring expertise 
To provide ongoing equity capital support , banking interfacing, and tax efficient structures.
 
Source: Pender West Capital Partners 

Strategy

Industry Generalists
Pender West generally pursues opportunities in the manufacturing, distribution, consumer products and business services sectors. We target specific industries with favourable qualities such as strong growth prospects, barriers to entry, fragmented customers and suppliers, and economies of scale.

Pender West does not invest in start-ups, early stage financings, direct natural resources or high technology sectors.

Sustainable Competitive Advantage
Our prospective investment companies should have strong competitive positions within their industry. This competitive advantage may be derived from various factors including:

Proprietary, differentiated or branded products or services
Significant barriers to entry and/or low cost operating platform
High performing company culture
A loyal and broadly-based customer franchise

High Performing Companies
We target high performing companies that are profitable and have a demonstrated track record of success. Common characteristics of a successful investment company include:

Highly motivated, capable management teams whose entrepreneurial spirit would be enhanced through meaningful equity ownership
A significant and defensible share of a well-defined market
A strong historical financial profile with sustainable recurring cash flow, high EBITDA margins, and high return on net assets
A potential for long-term growth and value enhancement

Investment Scope
Specifically, our investment scope includes:

Businesses based in Canada or Western U.S.
Recurring EBITDA of $2 - $6 million
Initial target equity investments of up to $10 million
Majority buy-out investments, and ability to co-invest alongside other financial partners for larger transactions
No set hold period or investment horizon
Industry generalists, with special interest in food, trucking & logistics, packaging, recycled products, branded consumer products, business services, niche manufacturing and distribution

Acquisition Candidates
Key acquisition candidates include:

Recapitalization of Family Owned or Closely Held Companies
Where shareholders of certain family owned or privately held companies wish to diversify their holdings or achieve liquidity by selling a partial amount of their ownership, Pender West can play a significant role in enabling such shareholders to achieve their goals. Pender West has the expertise to structure and recapitalize the company and to provide the equity component to maximize the desired recapitalization.

Management Buyouts of Private Companies
In situations where the principal shareholder(s) of a private company decides to sell and exit the business, Pender West will assist the management team to facilitate the buy-out.

Founder Divestiture
Investments in companies where the founder is looking to exit all or most of his holdings, and wishes to ensure a respectful go-forward environment for his management teams by the new acquirer.

Corporate Divestitures
Where a major corporation has identified a business unit as “non-core” Pender West will work with the management team of that business unit to enable both the successful divestiture of the business unit by its corporate parent and the acquisition of the operations by the management team.

Strategic Acquisitions (Add-ons) for Existing Portfolio Companies
Pender West is constantly looking for acquisition opportunities for our existing portfolio companies. These opportunities can be in the form of out-right corporate acquisitions, financial advice, mergers, revenue or product line platform acquisitions.

Source: Pender West Capital Partners