Target Information

GHY International, comprising Geo. H. Young & Co. Ltd. and GHY USA Inc., is a prominent player in the North American trade compliance and brokerage services sector. Established in 1901 and headquartered in Winnipeg, Manitoba, GHY International excels in providing comprehensive support and guidance to North American companies engaged in international trade. The firm has built a robust reputation for delivering effective Customs Brokerage and Compliance Consulting tailored for North American importers.

Under the leadership of Co-CEOs Richard Riess and Chris Bachinski, GHY has sustained its legacy for over 123 years, emphasizing a commitment to exceptional service and an unwavering focus on client needs. Following SeaFort Capital's majority investment, Riess will retain a significant equity stake in GHY, while members of the current executive team will also become shareholders, ensuring continuity in leadership.

Industry Overview in Canada

Canada’s trade compliance and brokerage industry is evolving rapidly, driven by increasing globalization and the complexities associated with international trade regulations. Canadian firms are adapting to various trade agreements and compliance challenges, necessitating a strong partnership with experts in customs and trade brokerage.

The industry is characterized by a mix of established players and newcomers, all striving to offer innovative solutions for navigating the intricate landscape of customs compliance and brokerage services. Key trends involve the integration of technology to enhance efficiency and accuracy in trade processes, stimulating interest and investment in the sector.

Furthermore, as Canada continues to expand its trade relationships internationally, the demand for proficient trade compliance services is on the rise. Companies that can demonstrate expertise and reliability in navigating customs issues will likely experience significant growth opportunities.

In recent years, there has also been a noticeable trend toward consolidation within the industry. Larger firms are acquiring smaller competitors to broaden their service offerings and geographical reach, fostering a more competitive market landscape.

Rationale Behind the Deal

The partnership between SeaFort Capital and GHY International stems from a strategic intent to leverage their collective capabilities for mutual growth. SeaFort aims to invest in a business that not only maintains a market-leading position but is also seen as a premier choice in trade compliance and brokerage services.

With a legacy spanning 124 years, GHY is well-poised to capitalize on emerging opportunities in the trade compliance landscape. The transaction will facilitate GHY's growth trajectory by enabling investments in technology and potential acquisitions to enhance service efficiency and client satisfaction.

Investor Information

SeaFort Capital, headquartered in Halifax, Nova Scotia, specializes in private equity investments within the lower mid-market segment of Canadian businesses, particularly those with EBITDA ranging from $2 million to $15 million. The firm operates with a growth-oriented investment philosophy, establishing long-term partnerships to foster the expansion of leading Canadian companies.

Established with a commitment to strategic investment, SeaFort Capital Fund II LP has a total committed capital of approximately $189 million. The firm focuses its investments on sectors including business services, value-added distribution, specialty manufacturing, and health services, keenly seeking opportunities that embody significant growth potential.

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The investment made by SeaFort Capital in GHY International is indicative of a well-calculated strategy to align with a leader in the burgeoning trade compliance industry. Given GHY's established brand reputation and extensive industry knowledge, this partnership could be viewed as a prudent venture with substantial upside potential.

Investing in GHY enables SeaFort to tap into a market that is likely to see ongoing demand due to international trade complexities. The focus on technology and service enhancement positions GHY well for future growth, leading to potentially strong returns for investors.

Moreover, with the existing senior management team remaining in place, the continuity of experience and insight can facilitate a smooth transition and the execution of growth plans. The synergy created through this collaboration could open new avenues for GHY, further solidifying its market position.

Overall, the strategic alignment between SeaFort's investment goals and GHY's operational strengths suggests that this deal presents a compelling investment opportunity that could lead to significant gains in the expanding trade compliance sector.

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