Raymond Rebar's ("Raymond") business was the design, fabrication and installation of reinforcing steel for the construction market in Ontario, Quebec, British Columbia and certain neighbouring U.S. states. Rebar is used to increase the strength of concrete and is extensively utilized in such projects as the construction of roads, bridges, industrial complexes, sports facilities, and commercial, residential and institutional buildings. The Company serviced its markets through three plants, located in Milton, Ontario; Ottawa; and Surrey, British Columbia. The business, which was founded in 1968, was in the top tier of rebar fabricators in Canada.
Raymond's owners operated other construction industry related businesses and concluded that while the businesses share a similar customer base, the growth and profit potential of Raymond could better be achieved by an owner more focused on the rebar industry.
Raymond's owners engaged Private Capital to seek out a buyer for Raymond's three divisions.
Private Capital contacted many businesses in the general vicinity of each of the Raymond operations which it believed would potentially represent a good strategic fit with Raymond. It became clear soon into the assignment that it was unlikely that a single buyer would be found for all three operations, due to their geographic dispersion and the fact that the construction market had taken a downturn, affecting the Milton plant the most. Buyers were ultimately found for both the Ottawa and Surrey plants, with the owner deciding to continue to operate the Milton plant at least until the market improved.
As a result of the agreements between Raymond's owners and the buyers, a portion of the proceeds from the sales was paid to the vendors on a deferred basis. Private Capital's fee structure anticipates this possibility and provides for success fees to be paid by the vendor only when the Vendor receives payment from the buyer Typically, 80-90% of Private Capital's fee compensation is only payable upon successful completion of the assignment.
