REGINA, Sask. - Wanted: trucking companies that could use $1 million in extra operating capital.Believe it or not, there are venture capitalists looking to provide transportation companies with that t...
REGINA, Sask. – Wanted: trucking companies that could use $1 million in extra operating capital.
Believe it or not, there are venture capitalists looking to provide transportation companies with that type of investment to diversify, enhance or expand their operations.
CWS Logistics president Lee Stange knows the secret of attracting this type of investment, but he isn’t talking.
Recently, Golden Opportunities Fund, a Saskatchewan labor-sponsored venture capital corporation, provided $1.25 million to the Regina-based company.
Stange declined to be interviewed on the investment, but in a media release he indicated the funding was needed for expansion.
“With the completion of another major logistics service agreement with ICM Global, the company required a strategic partner to support our expansion plans.
“Golden Opportunities, a local supplier of venture capital, was able to react quickly and professionally, enabling us to meet the demands of our service,” wrote Stange.
Grant Kook, chief executive officer and chairman of Golden Opportunities Fund, said the venture capital fund heard about CWS Logistics through networking in the Saskatchewan business community. Fund officials discovered that CWS Logistics required additional capital to expand its warehouse facilities.
It also captured their attention because the company is not only a trucking firm, but also an independent warehouser.
“They are in the logistics transportation business and the largest independent logistics company in Western Canada,” explains Kook.
“We also looked at their management and felt it was a good fit.”
CWS Logistics provides a full range of logistics and warehousing management solutions to major corporations through 500,000 square feet of warehouse space.
The Golden Opportunities investment was made through the purchase of retractable, redeemable preferred shares bearing a fixed dividend as well as Class A shares in the company.
“It took us about two weeks to decide to offer them a term sheet (statement of financing conditions). Then it took about two to three months to close the transaction,” says Kook.
In addition to providing financial support, Golden Opportunities also provides management support and now maintains a seat on the board of directors.
Fund officials are in regular contact with the company and provide advice as required on business decisions.
Kook says Golden Opportunities, like other venture capital funds, are interested in providing assistance to other transportation-related companies.
“I suggest companies complete their business strategy and plan before coming to see us,” he says.
“Then we would be more than happy to take a look at them,” he concludes.