ENTREC Corporation: Rising Up

Rising Up: ENTREC Corporation Reaches New Heights ENTREC uses strategized rapid growth to base a strong and purposeful acceleration into the crane market.

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By Nerissa McNaughton

ho is ENTREC? The company, built on a combination of acquisitions and organic growth, dates back to 1995 with the formation of Schell Equipment. In 2009 a public capital pool company called EIS Capital was formed. Heading the management team were the former executives of Eveready Inc.: executive chairman Rod Marlin, former CEO of Eveready Inc. and the founder/president of Marlin Travel Group; president and CEO John Stevens, former VP and CFO of Eveready Inc. and the former president, CEO and COO of NC Services Group; and CFO Jason Vandenberg, former vice president finance and CFO of Eveready Inc., and former vice president finance of Afexa Life Sciences Inc. In May 2011, EIS Capital acquired non-core heavy hauling assets from Flint Energy Services. At this time the EIS Capital name changed to ENTREC, which stands for energy, transportation, rigging, engineering and cranes.

After the Flint Energy Services acquisition, ENTREC expanded rapidly. Thirteen more acquisitions worth over $200 million followed as ENTREC looked to aggressively expand both geographically and in operational scale.

Currently, ENTREC services the oilsands and liquefied natural gas industry (LNG) in Western Canada, along with the Bakken oilfields that stretch into North Dakota in the United States. Other industries serviced include conventional oil and gas, mining, petrochemical, pulp and paper, infrastructure, refining and power generation.

The rapid trajectory of ENTREC’s earnings speak to the management of the company, the assets and the confidence of the stakeholders. In just one year (December 31, 2012 to December 31, 2013) revenue increased from $132,491,000 to $212,911,000. During this time period ENTREC’s asset value grew from $265,369,000 to $359,787,000 and shareholders’ equity rose impressively from $115,992,000 to $179,768,000.

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Regardless of how quickly ENTREC grows (and the rate of growth is truly astounding) or how successful the company becomes, the corporation is quick to credit their valued employees, from administration to drivers and crane operators and logistics, as critical components in their success. For ENTREC, employee ownership is a mandate that gives each worker a vested interest in the company and allows the employees to share in the benefits of the corporation’s success. The company’s core values ensure employees are guaranteed a safe working environment where they will be motivated, engaged and respected.

Through additional core values, the company further pledges exceptional customer service that exceeds the needs of each client, integrity in every transaction and improvement of the communities and environments in which they operate.

Clearly ENTREC has reached a high point of growth, customer service and employee satisfaction – but they are just getting started.

“Each acquisition, along with the rapid organic growth, was a stepping-stone and laid the foundation for our overall goal: to enter the crane business in a serious and impactful way,” says John Stevens, president, CEO and director of ENTREC. “We will become Western Canada’s number one crane business because of engaged employees delivering excellent customer service and doing it safely; and we will remain in that number one position because we will never deviate from our core values and our commitment to our communities and the environment.”

In an open shareholders’ letter (2013) Stevens noted a very significant development ENTREC undertook in support of their goal. “The year’s most important event was our acquisition in July, 2013, of GT’s Crane and Transportation Services Inc. GT’s was based in Grande Prairie and had approximately $53 million in annual revenue, recently built state-of-the-art equipment, including 45 cranes, and had a well-designed facility under construction. The acquisition was valued at approximately $54 million in cash and shares and made ENTREC the leading crane services and heavy haul provider in northeast B.C. and northwest Alberta.”

Can they sustain their momentum as they increase their market share in the crane industry? Of course they

John Stevens

can. ENTREC’s growth is the result of careful and calculated planning; the future has not been left to chance.

“We had a strategy,” Stevens explains. “We wanted into the crane business and also wanted to grow geographically. This means we had to get into the oilsands.

We did acquisitions in Fort McMurray and Bonnyville, as well as acquisitions that got us into all of the major oil and gas producing centres: the Bakkan region, northern B.C., northwest Alberta, and more.”

Evidence of this strategy is displayed in Steven’s beautiful office, which resides on the third floor of ENTREC’s stunning new 100,000-plus-square-foot headquarters on the western edge of Acheson. From his floor-to-ceiling windows Stevens can see over 60,000 vehicles go by daily on the Yellowhead Highway. The hutch on his desk is topped by a long line of baseball caps; each one is

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from a company ENTREC acquired and they are lined up in the order the acquisitions took place.

Further evidence of the aggressive strategy is a short walk away to the yard where, in addition to the heavy haul equipment (a fleet of 840 multi-wheeled trailers, 400 hydraulic platform trailers and 235 tractor trailers across all locations), you can see some of their 235 cranes.

In 2013 ENTREC’s cranes totalled 165. The addition of further 70 cranes over the past year, creating a crane fleet now worth a combined $150 million, demonstrate the company’s growth and the company’s commitment to becoming the premier crane service provider in Western Canada.

“We are well positioned to take care of the oilsands industry,” says Stevens, pointing out the importance of all-terrain cranes in the oilsands, especially for MRO work. “The maintenance work is certainly there and ongoing. We are prepared to take full advantage of the growth of in situ.”

Currently, ENTREC is doing a wide variety of work for all of the industry’s major oil and gas corporations as well as engineering and procurement companies. The very diverse and extensive client list includes all the heavy hitters across every western Canadian region that has natural resources interests. These clients include: Husky Energy, Suncor Energy, Encana, Esso Imperial Oil, MEG Energy, Canadian Natural Resources, Devon Energy Corporation, Laricina Energy Ltd., Cenovus Energy, ConocoPhillips Canada, Nexen, Shell Canada, Rio Tinto Alcan, Apache, Paramount Resources Ltd., Progress Energy Canada Ltd., WorleyParsons Resources & Energy, Flint Energy Services, Fluor Canada Ltd., JV Driver, Bantrel, PCL Construction, URS Corporation, Express Integrated Technologies LLC, CB&I and Ledcor Group.

The crane fleet is capable of mastering any application. The fleet includes: • Crawler cranes for use in oilsands mining and in situ construction, LNG construction, infrastructure and miscellaneous projects • Rough terrain cranes for use in oilsands mining and in situ construction, LNG construction and drilling and other construction projects • Carry deck cranes for use in plant site maintenance and construction • All-terrain cranes used in the oilsands, maintenance and repair operations (MRO), taxi work, LNG drilling, infrastructure and other industrial work • Hydraulic truck cranes used in oilsands MRO, taxi work, LNG drilling, infrastructure and other industrial work • Picker trucks (the largest fleet in Canada) used for in situ MRO in the oilsands, conventional oil and natural gas projects and other industrial work

In 2014, ENTREC claimed the fourth spot on Alberta Venture’s Fast Growth 50 list and was also named as one of Alberta’s Top 65 Employers. “It all comes back to employee ownership,” says Stevens who credits every hardworking member of the team for the recognitions. “We

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are really big believers in employee ownership. It’s been our goal to be in the Top 65 since day one. We achieved this because of our core values and employee ownership program. We built our entire business model on engaged employees and strong core values. Out of 700 employees, 500 are owners in the company. This certainly helped us achieve such a high rating in the Top 100 program.”

Another driving factor for the Top Employer’s recognition is ENTREC’s “if it is important to our employees and important to our customers, it’s important to us” philosophy.

To this end, ENTREC has supported one of their employees who ran across Canada in support of cancer research, provided a free barbecue meal to the volunteers helping with the High River flood, donated a bobcat and crew to last year’s flood cleanup efforts, sponsors playgrounds, local 4-H clubs and so much more.

Stevens’ leadership has also been recognized. In 2013 he was winner in the Leaders of Tomorrow awards and a finalist in Ernst & Young’s Entrepreneur of the Year awards (prairies region) in the emerging entrepreneur category.

The future holds nothing but promise for ENTREC. Bitumen production in the oilsands remains at or above forecasts with a steady increase predicted through 2030.

Proposed LNG export facilities and four possible pipelines prove the outlook for the LNG industry strong as well. With ENTREC ideally situated in the heart of these thriving sectors, there is only one direction for the company to go: up.

“We are just getting started,” smiles Stevens. “The crane and heavy haul industry is a worldwide industry.

Our goal in 10 – 15 years is to be a worldwide company.

We will take advantage of the growth here and then we will venture past this geographical region. We will keep growing and succeeding, and we will do it the same way we built our company to this level; with employee ownership and engaged employees.”

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