- Growing a national footprint in a burgeoning industry
- Tapping into changes in the construction sector
- A market leader and the first consolidator of Canadian suppliers
What Atlas Engineered does:
This growth company is acquiring profitable and well-established firms in the sector and since listing as AEP in November 2017, with just one manufacturing plant of its own, has acquired five further companies. The opportunity to be acquisitive is large because many are aging companies, whose owners are looking to monetize their considerable investment.
Atlas aims to strengthen the finances of these smaller firms, protect the interest of the owners, while providing career growth to loyal employees. Companies acquired recently include Satellite Building Components (Ontario), Coastal Windows and Doors (BC) Pacer Building Components (Ontario), and South Central Building Systems (Manitoba).
Trusses, for the uninitiated, are the pre-fabricated, triangular frameworks that support the roof of a house.
The firm says the addressable market in Canada for trusses, joists and engineered beams is a whopping $1 billion, while it's $2.5 billion for those products, along with prefabricated walls and floors.
Atlas Engineeered cites several trends in Canada and the US, which are beneficial to the company, including the rise in popularity of multi-floor residential wood-framed buildings as affordable housing and favorably priced (cheap) acquisition opportunities. There is also now a shortage of skilled labou for traditional construction, so easily assemble parts are in demand.
How is it doing?
The company is certainly growing at a decent rate, as evidenced by recent financials, and benefiting from organic growth and the benefits of its acquisitions.
On May 31 this year, the company reported a near three-fold increase in first-quarter revenue (notably the slowest quarter traditionally in the construction sector), namely C$6.2 million for the three months to end March (having changed period end from Feb 28), nearly triple the C$2.1 million in revenue in the year-ago quarter. Revenue from new acquisitions was around C$3.1 million, versus C$37,000 in the previous year.
The firm said its performance aligned with its focus on growth and profitability and it was increasing cashflows and strengthening the balance sheet.
"We're extremely fortunate about the quality of the businesses that we acquired, they all, but all have reported strong organic growth numbers. I'm very very proud of that," CEO Dirk Maritz told Proactive following the results.
Notably there has been organic growth of 20% for the last 12 months at its six businesses, and the company says there are growing EBITDA (underlying earnings) margins for fiscal 2019 (to end December).
Maritz explained how the firm has prepared for the busy summer construction season, now beginning, including putting in place a high quality management team and also reorganised its sales structure.
The sales team are now hunting for new contracts, he said, adding that the order books were looking "exceptionally well" for the rest of the year. Atlas has also been improving capacity and workflow at its plants (which make the products).
Last week, the firm said it had doubled capacity at its Satellite building components plant in Merrickville, Ontario, to keep up with demand.
The company has now installed a fully automated roller gantry, customized cutter saw and expanded pressing system, it said. Large mounted display screens eliminate the use of paper and overall production has been sped up significantly.
What the boss says:
Atlas Engineered CEO Dirk Maritz has said: "We're creating the future of what this industry is going to look like and we're exceptionally happy that we have a team that can deliver on the promises that we've made to our shareholders."