Targeted expansion

Rick McAleer, Steve Taylor and Geoff Shorten are three of the key members of the management team at WesternOne. McAleer and Taylor were instrumental in the process that turned WesternOne from a typical rental operation into an income trust.

The story behind WesternOne could be said to begin with the establishment of Production Equipment, an equipment rental company that began operations in February 1998. Production Equipment was founded by Colin Franklin and Kit Williams as the operating partners, and Joe Garrety and Aaron Silverman as additional co-owners.

Steve Taylor  had worked with Franklin and Williams for five years prior to joining Production Equipment in January of 1999. When the owners decided to look for a purchaser for the company in 2006, it was Taylor and another long-time staff member, Ron McAleer, who developed the presentation and went looking for potential suitors.

“Colin Franklin had just turned 60, and was looking to retire. Consequently, we went to Ernst & Young to develop a strategy for selling the company,” says Taylor. “We made a number of presentations, but it was some time before we found someone who saw the real merits in the organization.”

That person was Darren Latoski, a Vancouver-based entrepreneur who currently fills the position of CEO at WesternOne Equity. It was Latoski’s idea to turn the company into an income trust.

The official general partner is WesternOne Equity (WEQ). The main focus of WEQ is still the rental operation and sales, which currently operates as WesternOne Rentals & Sales. It’s a new brand for a group of existing companies, including Production Equipment in Vancouver, Old Country Rentals in Victoria, and C&N Rentals, located in the Comox Valley area of British Columbia. In addition, a number of new acquisitions in Alberta have started operating under the WesternOne Rentals & Sales banner as of Oct. 1, 2010.

The company has a big mandate, but Steve Taylor says it can be stated quite simply.

“Our mission is to become Western Canada’s largest equipment rental company,” says Taylor.

It’s an impressive goal to shoot for, but there are indications that WesternOne Rentals & Sales is already well on its way. Currently, there are 13 locations spread across British Columbia and Alberta.
 The company made the Vancouver Sun’s Annual 2009 Business report of B.C.’s Fastest Growing Top 50 Companies. This is somewhat of a rare distinction for an equipment rental firm, especially during a recession year.

WesternOne Rentals & Sales frequently rents equipment for movie sets. Vancouver is sometimes known as “Hollywood North”, although the title is hotly contested by Toronto.

The official general partner is WesternOne Equity (WEQ), formed in 2006. The company’s expansion began shortly thereafter.

“The following spring, we bought a company called Old Country Rentals in Victoria,” says Taylor. “It was a two store operation with a good history. They’d been around for about 35 years, and they’d been longtime members of the CRA. The other acquisition that kicked off our expansion was C&N Rentals in Comox, which had been operating for about 15 years.”

The expansion continued into Alberta in late 2007 with the acquisition of Deerfoot Rentals in Calgary. The Deerfoot Rentals operation consists of locations in Calgary and Lethbridge, and is part of the Volvo Rents network. Davis Sure-Fire Heater Service was acquired around the same time.

Geoff Shorten is the former partner/owner of the former Deerfoot Rentals stores, and fills the role of chief operations officer of WEQ.

“One of the bigger challenges we faced when expansion first got going was drawing everyone together with a common cause and purpose,” says Shorten. “We solved it by clear communication of our core values and making special note of what each operation brought to the table.”

WesternOne Equity has continued to expand in 2010. In April of this year, the firm purchased the Alberta-based OnSite Equipment Rentals, with offices in Lethbridge, Calgary and Edmonton.
According to Steve Taylor, OnSite Equipment Rentals was a good choice for acquisition, as the company is essentially a “carbon copy” of Production Equipment, the company that formed the basis of WEQWesternOne Equity. This is not too surprising, as Aaron Silverman was a major partner in both.

October 2010 marked the official rebranding of all locations (with the exception of Davis Sure Fire) as locations of WesternOne Rentals & Sales.

“We wanted to be known as one company,” says Taylor. “It’s confusing for the market to have it otherwise. And we’re proud to be a 100 per cent Western Canadian company.”

All of the locations may share a common name, but they have a wide and diverse base of clients.

“We have different specialties in different places,” says Taylor. “In Victoria, they do a lot of work with the shipyards and the Department of National Defence. Here in Vancouver, we do a lot of work with the movie business. In Alberta, it’s construction heat. We pride ourselves in specializing in different markets. It’s given us diversity in tough economic times.”

With 13 locations in two provinces, it would seem that WesternOne has done very well in weathering the economic storm. That’s not to say that there haven’t been challenges along the way.

“We started out in 2006, and that was a dynamite year for pretty much everybody. 2007 was very similar to that,” says Taylor. “Things were different in 2008 and 2009. It was an odd situation. We knew we were riding this bubble, and we all knew it was going to end, but nobody really expected it to end so fast and so hard.”

Even with the sudden onset of the recession, the rental business in British Columbia still had major projects to look forward to, with the coming of the 2010 Winter Olympics to Vancouver. Construction and renovation related to the Olympics was relatively robust, but the rental industry in the province still faced economic adversity.

“A lot of us had gone out and bought more equipment, anticipating increased need because of the games,” says Steve Taylor. “Then halfway through 2008, the industry hit the wall, and there was an overage of equipment. Things got very competitive, and prices got very volatile.”

Volatile or not, to an outside observer, it’s clear that WesternOne has pulled through with flying colours. In early August, the company announced another proposed acquisition, this time of an engineered scaffold business that specializes in the rental, sales, installation and servicing of scaffold equipment. The company operates from a base in Calgary with operations covering northern and southern Alberta. By the time you read this, the transaction may already have taken place.

“We’re excited about this, in particular the opportunity to strategically expand our product offering to include engineered scaffold products and related services,” says Geoff Shorten. “This transaction would allow us to enhance our market share in Western Canada by offering our customers a more complete range of equipment rental services.”

For more information on WesternOne Rentals & Sales, please visit the website www.westernone.ca. For more information on WesternOne Equity, please visit www.weq.ca.