Boyd's business model a winning strategy in U.S.

In the last year-and-half, the Boyd Group Income Fund has increased its U.S. footprint by 72 locations, more than doubling its size there.

Industry players have been coy about which of the handful of collision-repair consolidators was the largest.

Not anymore. Boyd is the largest.

But that doesn't mean Boyd Autobody and Glass is a household name in all 50 states.

The company's main trade name in the United States is Gerber Collision & Glass and its recent acquisitions of the regional U.S. chains Cars Collision Center and True2Form Collision Repair Centers have yet to undergo any rebranding.

With 128 of its 166 locations being in 13 states, Boyd's U.S. operations are crucial to the overall company.

Boyd's management model has had more than 20 years to mature and is now better positioned to capitalize on changing trends in the industry.

Key among those trends is a greater appetite on the part of auto insurers, especially in the United States, to concentrate on preferred suppliers with multiple locations, such as Boyd. It means the fundamentals in the industry are favourable to Boyd's business model.

"Insurance companies recognize that they want to deal with fewer, larger providers," said Boyd CEO Brock Bulbuck. "That translates into market-share gain and same-store sales growth."

Boyd is also showing up on more radar screens of U.S. institutional investors, which has helped push unit prices up from the $2 range a couple of years ago to more than $10 (they were as high as $14.50 over the summer).

THE retirement last month of company founder and longtime CEO Terry Smith is significant for a company that's only about 20 years old.

But's it's also a testimony to the strength of the enterprise that it is able to forge ahead unabated.

Boyd units were up 10 cents to $10.20 on Wednesday after reporting sales of $97.3 million for the third quarter, with a 26.6 per cent increase in operating profit, despite an unfavourable currency-exchange rate.

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All of the attention is being paid to the legislative dismantling of the Canadian Wheat Board, but there are significant shakeups occurring in the specialty crop business.

Last week, the Winnipeg-based Canadian operations of German grain trader Alfred C. Toepfer bought Saskatoon-based Western Grain Trade Ltd. and Western Grain Cleaning and Processing Ltd.

The company has two modest-sized plants in North Battleford where it processes and exports peas, lentils, mustards, flaxseed and various special crops.

Lawrence Yakielashek, president of Toepfer Canada, said it's the first-ever investment in specialty crop processing for the privately held Hamburg-based company, one of the largest grain-trading companies in the world. American commodities giant ADM owns a controlling stake in Toepfer.

He said the timing of the acquisition had nothing to do with the recent legislation introduced in Ottawa that is to end the CWB's monopoly by next August.

Yakielashek said Toepfer has been buying specialty crops from Canadian processors and exporting it to its customers around the world for many years.

"They (Canadian specialty processors) did a fantastic job, but we really wanted to be intimately involved in the quality that was being delivered to the processing plant rather than what we got loaded on a ship," he said.

Toepfer has been one of the CWB's largest accredited exporters, meaning it already uses it 40 offices around the world to sell Canadian wheat and barley.

Some wring their hands about the possibility of foreign grain companies taking over in a post-CWB market. But along with a couple of large Canadian companies, they are already playing in the space and now they're branching out into the specialty crop business, as well.

If nothing else, it shows the increasing value the global industry sees in the Canadian agricultural sector.

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Speaking of the global marketplace, the Canadian Manufacturers & Exporters (CME) is holding a major trade summit in Winnipeg on Nov. 22.

In its ongoing efforts to encourage more small and medium-sized Manitoba companies to pursue more foreign markets, the CME has put together a program showing how to assess the opportunities and identify the support services available.

To register online, follow the links on the CME website: http://mb.cme-mec.ca/

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 10, 2011 B6