“We had a very simple deal with the TorQuest team. We were responsible for improving EBITDA and they were responsible for improving the multiple. When we both got it right, we had a great outcome.”
Founded in 1978, and by the time of our investment in late 2018, Cando had grown to become one of the leading rail service providers in Canada. Throughout Cando’s history, the Company believed in the power of employee ownership, implementing a successful share ownership plan decades before TorQuest’s investment. By the time we invested in Cando, the plan had grown to nearly 400 active and retired employee shareholders.
Despite years of the ownership plan’s success, Cando realized they were at a crossroads with retired shareholders preferring distributions, and active employees wanting to re-invest for growth, given the significant opportunities in front of the business. Cando’s founder, Gord Peters, wanted to bring on a majority shareholder partner to align Cando’s shareholder base, provide the liquidity for retired employee owners, and to support management’s growth ambitions — both strategically and with significant capital.
In early 2018, CEO Brian Cornick was tasked with finding that partner. After a few weeks of getting to know each other, TorQuest was chosen as the Company’s partner. Why TorQuest? We understood the value Cando provided to its customers and committed to supporting management’s growth vision. Perhaps most importantly, we earned Gord and Brian’s trust and demonstrated we had what it took to be stewards of the business and partners to its employees.
Together with Brian and the entire Cando team, we collectively strengthened and transformed the business – from a service provider to a strategic asset owner & operator. We invested significantly in our own infrastructure as well as in our shipper customer’s infrastructure. We grew Cando’s management team, helped improve their systems and processes, pushed for improved contract terms & lengths, and helped to refine Cando’s strategy. The results were a dramatic growth in earnings, significantly ahead of expectations, and a deepening of Cando’s relationships with its customers and Class 1 Railway partners. In addition, we repositioned the business to appeal most to core plus and value add infrastructure investors. In late 2022, The Alberta Investment Management Corporation (“AIMCo”) acquired a controlling interest in Cando out of their Infrastructure group, resulting in an excellent outcome for both TorQuest and our employee shareholder partners.