Canadian Rental Service

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Putting it all together

Adam Snook and his partners at First Choice Equipment Rentals have followed their noses to impressive growth. Every time they try something new, it seems like they stumble across another opportunity.


January 29, 2013
By Patrick Flannery


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Adam Snook and his partners at First Choice Equipment Rentals have followed their noses to impressive growth. Every time they try something new, it seems like they stumble across another opportunity. With good timing and a keen eye for synergies, they have grown First Choice from its beginnings in tiny Wetaskiwin, Alta., into a thriving concern with 18 rental employees and 150 oilfield employees in five locations in just six years.

combo 
Now that’s creative packaging. First Choice offers a flatbed trailer with two portable toilets, a light tower, a garbage bin and a used oil bin as a single rental item to oilfield operators. From left are Sam Couturier, Mark Thibeault, Adam Snook and Bart Klein.


 

First Choice is part of a group of five companies owned by Snook and his partners, Pat Grzyb and Pat Kilduff. Snook has been in the rental business for 15 years, working in Saskatchewan and Alberta with United, RSC, Hertz and Skyreach. He is a mechanic by trade, but not the type of guy to stand pat in a static situation. His restless search for new opportunities is what brought him to the rental industry in the first place, when he was living in his hometown of Regina. “RSC was running an ad for an apprentice mechanic, so I took the position,” Snook explains. “I fell in love with the industry immediately and all the different jobs every day. Never the same repetitive position. I don’t like punching the same button or sitting at a desk reading the same reports daily.” Snook left the rental industry for a time when he saw an opportunity to start a contracting business for drinking water systems in small-town grocery stores. He spread that business through Saskatchewan, then moved into Alberta. The business was lucrative, but the schedule was punishing. “I got kind of tired of being on the road,” he says. “I was putting on 120 to 130 thousand kilometres a year.” So Snook settled down in Alberta and took a job managing the Rental House location in Wetaskiwin, a small town of 12,000 about 40 kilometres south of Edmonton.

In 2006, an opportunity arose to buy that location. Snook had the idea that there was a lot of opportunity for a rental business in the area with all the growth going on in northern Alberta. He approached his uncle, Kilduff, and his longtime business controller, Grzyb, about joining him in the enterprise. They were interested, and Snook became the operating partner of the shop. They retained the name Rental House initially for brand recognition. At the time Snook took it over, the Rental House in Wetaskiwin was pretty similar to small neighbourhood rental operations everywhere: a wide variety of lawn and garden tools with some light construction equipment for home renovators and small contractors. “We still have a little bit of that mix,” Snook says, “but being a small community we realized that there is only so much growth you can expect unless you expand your customer base.” First Choice is now a Stihl dealer and carries Bobcat skid steer loaders and Genie lifts.

Things really started to move when Snook jumped at another opportunity in 2008 to buy a business called Just Bins in Edmonton. This was a waste disposal company with 63 bins and relationships with homebuilders and small contractors. The U.S. recession was starting to affect the local economy, which had been growing at gold-rush rates for many years prior.

“We realized pretty quickly that a lot of businesses were going to start panicking,” Snook says. “They were selling their assets for asset value or below, sometimes.” Acting on this sharp analysis of the situation, Snook and his partners snapped up four new acquisitions: Just Bins, a fracking equipment provider called Empire Production Services, a vacuum water truck company called Missing Link Vacuum Service and a steamer company called Big Mack Steamers. Snook and his partners bought into those businesses, but kept the previous owners on as managers and minority partners. Bart Klein is Snook’s manager of the rental store and Mark Thibeault runs the waste management service.

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First Choice still maintains a full selection of homeowner and small contractor rentals, but there is only so much growth available for this side of the business in Wetaskiwin. Here, Tonya Walsh serves a customer.


 

What Snook quickly found was that every company could drive business for every other company. “What has led to a big part of our expansion is we started focusing on the synergies between them,” Snook explains. “We significantly expanded our fleet of bins first because we were going to start approaching

larger home builders. Once we had the bins and trucks in place, it started. The first thing they started requesting was portable toilets, which we were not into at the time, but we go into in a hurry. Then, slowly, the guys would start calling in for pumps and dehumidifiers. So we got to a point where we decided to bite the bullet and go all in and buy 45 generators.”

Snook is a big fan of Doosan generators. “Doosan is the easiest company I have ever seen for extending credit once you have a relationship with them,” he says. “There is no credit application for every transaction, it is just a general security agreement. If I needed 25 machines for tomorrow, I would call them, order them and just go to Edmonton and pick them up. It is a very beneficial relationship.”

The waste bins got First Choice on to construction sites, which drove rentals of power equipment, generators, pumps, heaters and fans. Once contractors realized they could get all this equipment from the same place that provided their waste disposal, the waste disposal business began to outcompete other providers that were more one-dimensional. Today, Just Bins (now First Choice Waste Management) owns 700 bins that it manages in Edmonton, Calgary and Regina. Snook says his interlocking approach to business grows out of the realities of operating in a small town. “These days are hard on all the rental companies, and guys in small towns are going to have a tough time getting any traction and finding a way to grow,” he says. “You have to start looking outside the box and looking for synergies in anything.”

The oilfield frack flow-back business is a very specialized kind of rental service. First Choice relies heavily on the expertise of Darren Weed and John Elzinga, partners who started the business and still manage it as operators. When a fracking team fracks an oil well, it forces tremendous quantities of water into the ground to build up pressure that cracks the underground rock layers, allowing trapped oil and gas to escape into the well. First Choice provides equipment to catch the “flow-back” – the water that comes back out of the well after the fracking process is completed. The First Choice team opens the wellhead and the water flows back into a tank that separates the water, oil and gas. The water is shipped away for another fracking operation, the gas gets flared off and the oil is shipped to storage tanks that are either trucked out or tied into a pipeline. 

As with the waste management service, the fracking operations have led to synergistic opportunities for rentals. “When it started off we were initially just looking to get into the oil patch because things were so depressed and we knew that companies were going to be selling cheap. So we bought it and ran it for about a year, then we started seeing opportunities for light towers. It is becoming standard practice: every frack has to have four light towers on it. It is a safety issue, to make sure everything is illuminated. There is so much machinery with moving parts it is dangerous at night if it is not. With Doosan, on the oilfield side, we went from one light tower and I think we are up to 40 of them now.”

Another innovative offering for the oilfields is First Choice’s combo trailers. The store puts two toilets, a light tower, a garbage bin and a bin for used oil on a flatbed trailer and rents the whole thing out. Now that is creative packaging. Snook was able to put this novel offering together because of the talents of his hotshot young fabricator, Sam Couturier. “He’s probably only 23 years old, but I wish I had half his intelligence with metal. He is by far the best metal fabricator I have ever seen,” Snook says.

First Choice’s success has now taken it international. The company has a large oilfield shop in Minot, N.D., and the manager, Tyler Beaulieu, is seeing terrific growth.

Snook chalks up a great deal of First Choice’s success to timing. “We timed the market properly in order to get some good deals on businesses,” he says. “I guess timing and synergy, but timing has been our biggest benefit. We knew there were going to be opportunities and we knew we had to chase them aggressively when things started selling for cheap in 2006.

Our revenue has grown to 30 times what it was when we started.”