Target Information

CAI Capital Partners ("CAI") is proud to announce that its portfolio company, the Universal Group, has successfully acquired Barricades and Signs Ltd. ("Barricades"), a well-established traffic control company based near Edmonton, Alberta. Founded in 2004 by Robert and Fran van Bruggen, Barricades has significantly expanded its operations over the years, now covering Alberta, British Columbia, Manitoba, and Saskatchewan. Under the leadership of CEO Jan van Bruggen, who has been with the company for the past eight years, Barricades has seen considerable growth and development. Jan will continue to oversee the operations of Barricades and has also become a shareholder in the Universal Group as part of this acquisition.

Jan shared his enthusiasm regarding the acquisition, stating, "I am honored to be leading Barricades into this exciting next phase of growth and evolution. Joining the Universal Group family aligns perfectly with our commitment to building healthy communities and supporting our employees and stakeholders as we strive to be our best. The alignment in vision and values between Barricades and the Universal Group is remarkable, and I look forward to seeing us thrive with their support and expanded network across Canada and the Pacific Northwest."

Industry Overview

The traffic control industry in Canada has been experiencing steady growth due to increased infrastructure spending and the rising number of construction projects. With governments at both federal and provincial levels investing heavily in public works, this sector is poised for continued expansion. Traffic control services play an essential role in ensuring public safety and efficiency during construction activities. As cities grow and evolve, the demand for effective traffic management solutions becomes increasingly vital.

In Alberta, where Barricades primarily operates, the market is influenced by the province's economy, which relies heavily on industries like oil and gas. The resurgence of investment in public infrastructure has led to a higher demand for traffic control services during road construction, maintenance, and expansion efforts. This trend is mirrored in other provinces where similar economic activities are taking place, thereby supporting overall growth in the traffic management sector.

British Columbia, Manitoba, and Saskatchewan also contribute to this positive outlook, with growing urban centers and a focus on safety regulations that necessitate professional traffic control services. Additionally, as more cities adopt smart city initiatives that require improved traffic management technologies, companies like Barricades are well-positioned to meet these needs with their expertise.

As traffic management becomes integral to urban planning in Canada, established companies like Barricades will benefit from their longstanding reputations, expert knowledge, and comprehensive service offerings, enabling them to capitalize on emerging opportunities.

Rationale Behind the Deal

The acquisition of Barricades underscores Universal Group's strategic intent to broaden its operational footprint across Canada. By integrating Barricades into its existing portfolio, Universal strengthens its position as a premier provider of traffic control services nationwide. This acquisition enables Universal to serve a wider client base, particularly in fast-growing regions like Alberta, Manitoba, and Saskatchewan, where there is a pressing need for effective traffic management solutions.

Furthermore, Barricades brings additional product lines to the Universal Group, enhancing its comprehensive service capabilities. This not only fosters increased market competitiveness but also creates a “one-stop-shop” for customers’ traffic management requirements, significantly improving service delivery and operational efficiency.

Investor Information

CAI Capital Partners is a private equity firm that specializes in investing in mid-market companies across various sectors, with a pronounced focus on growth and value creation. Through its extensive network and expertise, CAI aims to partner with companies that exhibit strong potential for development. In this instance, CAI’s partnership with Barricades and the Universal Group positions the companies for future success by leveraging shared resources and industry knowledge.

The equity co-investors in this transaction include BDC Capital, Roynat Equity Partners, and Frind Enterprises. Debt financing was facilitated by major financial institutions such as the Bank of Montreal, Canadian Imperial Bank of Commerce, The Bank of Nova Scotia, and National Bank Financial. Together, these partners provide substantial backing for Universal's strategic growth initiatives.

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This acquisition presents a promising opportunity for Universal Group, enabling significant expansion into new markets and enhancing its service offerings. The strong alignment of values and vision between Barricades and Universal Group indicates a synergistic partnership that is likely to yield positive outcomes. Jan van Bruggen's ongoing leadership is an asset that will ensure continued growth and operational excellence in Barricades' execution of traffic management services.

The traffic management industry is currently poised for growth, fueled by supportive economic conditions, increased infrastructure investments, and a growing demand for safety-focused solutions. Universal’s move to consolidate its market presence through the acquisition of Barricades positions it advantageously during this growth phase. The expanded service capabilities and geographic reach will provide Universal a competitive edge as it continues to grow.

Overall, the investment in Barricades aligns with Universal Group’s strategic goals and presents a significant opportunity for value creation. By bringing together the expertise and resources from both organizations, the potential for innovation and improved service delivery can be greatly enhanced. This deal is a commendable move that could lead to substantial long-term returns.

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