Alberta group buys Brandon’s Cando rail company
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In one of the largest deals in Manitoba in some time, Brandon-based Cando Rail & Terminals Ltd. has been acquired by Alberta Investment Management Corporation, (AIMCo).
Cando has been around for 45 years and used to be known as a short line rail operator – and still does run Central Manitoba Railway from East Selkirk to Carman – but in recent years has concentrated on building facilities that link large industrial shippers to Class I railways.
Details of the transaction were not disclosed and is scheduled to close this fall.
Brian Cornick, the president and CEO of Cando, said, “Many people in Manitoba may not know the Cando name, but this is a very big deal for Manitoba and for Canada.”
The company has more than 900 employees, up from 600 in 2018 when TorQuest, another large Canadian private equity firm, made a sizable investment in the company.
It has 210 total employees in Manitoba, 102 based in Winnipeg and 108 based out of Brandon.
The company has had a long and successful employee ownership program so that more than 400 are owners of the company.
It is not clear how that will be maintained under AIMCo ownership but Cornick said, “AIMCo likes what they see. They like our culture, our sense of ownership. My job now is to create the ownership model with AIMCo over the next two months.”
“Many people in Manitoba may not know the Cando name, but this is a very big deal for Manitoba and for Canada.” – Brian Cornick
While no terms were released an industry source said the final valuation was more than $800 million.
Since 2018, revenue more than doubled and EBITDA more than tripled. Cornick said the company has invested more than $200 million in the last two years and has another $200 million of expansion investment lined up.
It operates a network of more than 40 industrial rail yards in places like oil sands sites, potash mines, automotive production facilities and forestry sites. It has nine owned terminals and one short-line railroad and more than 100 locomotives.
AIMCo is one of the largest institutional investment managers in Canada with $168.3 billion of assets under management. It operates at arms-length from the government of Alberta and invests globally on behalf of 32 pension, endowment, and government funds in the province of Alberta.
AIMCo owns a similar company in the U.K. called Porterbrook Group which owns nearly a third of Britain’s rolling stock.
“Cando is the type of platform investment that has become the hallmark of AIMCo’s infrastructure portfolio. With this investment, our clients add one of Canada’s most successful rail platforms to their infrastructure portfolios,” said Ben Hawkins, head of infrastructure, renewables and sustainable investing at AIMCo, “We believe in Cando’s incredible potential and look forward to collaborating with their exceptional management to realize a continued track record of growth.”
The companies said there would be no changes to the way the company operates.
“We believe in Cando’s incredible potential and look forward to collaborating with their exceptional management to realize a continued track record of growth.” – Ben Hawkins, AIMCo
Gord Peters, the co-founder of Cando in 1978, has remained on the board until now.
He said the success of the company was partially facilitated by the Class I railroads wanting to streamline the industry.
“It is a real niche play with not many competitors,” he said. “The railroad industry wanted to change and Cando fit like a glove.”
Setting up and loading and unloading cargo at petro-chemical plants and large auto plants is time-consuming and tricky work. Cando builds and operates facilities that do that.
“It is a different business loading and setting up trains that (run) long and heavy down the main line,” Peters said. “CN and CP and the Class 1 railroad want the long and heavy trains set up and ready to go.”
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.