Finding the Right Strategic Partner to Grow Your Business
January 17, 2022 | Bonnie Elgie
Kleo Landucci, CEO & President, CrescentView Investments Ltd. and Board Member and former Managing Director of Ashcroft Terminal Ltd., has gone through the process twice and in this issue, she shares her experiences and the lessons learned along the way, including:
- Why her family identified the need for a strategic partner – twice!
- How her small family business brought together the world's largest container port operator with Canada's largest container importer
- The steps they went through to find the right partner
- Five key learnings gained from the process
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Kleo Landucci knows the value of strategic partnerships, having gone through the process twice with Ashcroft Terminal, her family’s business. After starting her investment career at Canada’s largest independent brokerage firm, Kleo joined CrescentView Investments to work alongside her father. One of the company’s most unique investment opportunities was a 320 acre industrial piece of land —with Canadian National Railway and Canadian Pacific Railways mainlines running directy through it — located in Ashcroft, British Columbia, 340 kilometres east of Vancouver. Ashcroft Terminal Ltd. (ATL), is an inland Rail Transloading & Storage Terminal, which offers logistics solutions for importers and exporters as a strategic location to support trade, and it became Kleo’s sole focus.
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“We had a vision for the site. We were successful in attracting a couple of large export customers fairly early on. The uniqueness of the location and proximity to the Class 1 rail mainlines allowed us to find a funding partner in Transport Canada for some critical rail expansion to keep the gateway fluid ,” she says. “We learned a lot about the trade policies of this country, the transportation regulations for shippers, and we really spent years trying to understand the problems facing exporters in every natural resource industry.”
In 2016, Kleo, her father and the small management team at Ashcroft realized that in order to grow, they needed to find a strategic partner, recognizing that it was in the best interest of the business and its customers.
They spent the next year preparing, researching every company in the world who would gain the most strategic value out of owning Ashcroft Terminal or being a partner in the business.
One of the key lessons learned early on is the vast time commitment to prepare for the process. “It's pretty difficult to run a business and run the strategic process, and it’s a more time-consuming endeavor than I ever would have imagined. We had a lean and mean team so we had to divide and focus, and as Managing Director of the business I just focused as much as possible on the strategic process,” Kleo recalls.
As part of their preparation, they identified 67 companies from Europe to South America, the Middle East to Asia, as well as the United States and Canada, and created files on all of them. When they were ready, they reached out to those companies through an invited – not an open – process.
“We ended up with 14 interested companies that were very keen on understanding more details about our business. And in the end, PSA International clearly emerged as the partner we felt brought that global expertise and operational know-how we needed,” says Kleo.
PSA International is the largest container port operator in the world with flagship operations in Singapore and Antwerp with a network of over 50 coastal, rail and inland terminals in 19 countries. Ashcroft Terminal was its first investment into North America, and they acquired 60% of the business.
“For a little family business that could, we were thrilled to walk down the aisle and say, ‘I do’ to PSA in July 2018”, she adds.
The strategic partnership with PSA brought the systems, structure and the backend operational mechanics that Ashcroft Terminal needed. Kleo was asked to remain a part of the business and stayed on for the next three years. She said it was an exciting time for learning and growth, and attributes their success to finding the right fit in a strategic partner.
In July 2021, Canadian Tire purchased a 25% stake in Ashcroft Terminal as its third strategic partner.
Kleo remarks, “It's a professional and personal thrill to have been involved in marrying up the world's largest container port operator with Canada's largest container importer.” While she has stepped away from her day-to-day role, Kleo remains an Ashcroft Terminal Board member, representing the family investment business, CrescentView Investments which retains a 15% stake.
Having gone through the strategic partnership process twice, she shares five key learnings:
- Make sure your company is not desperate to sell. You need to be prepared to walk away from a deal, no matter how sexy it looks, if it isn’t the right fit.
- Get an advisor to help you through the process.
- Listen to your advisor! You can challenge and debate with them, but do make sure to listen to their advice as objectively as possible.
- Keep your emotions in check and don’t let them get in the way. Put together a group of trusted people who can help keep you clear and focused as you go through negotiations.
- Hold on tight! Get ready for a wild ride because it is more time-consuming, exhausting and stressful than you can imagine.