Heavy Burden: Entrec continues to grow
Entrec has quickly carved out space in the lucrative crane and heavy-haul business
by Lindsay Shapka
|The 2015 FG50 List||Breaking It Down|
|Heavy Burden||Living it up Out There||Ending the Romance|
Photograph Ryan Girard
Head office: ACHESON
PRESIDENT & CEO: JOHN STEVEN
2014 Revenue: $213 million
Number of employees: 700+
On a chilly day in December of 2010, John Stevens met a friend for coffee who told him that Flint Energy Services was selling its non-core heavy hauling assets. He immediately called Jason Vandenberg (Entrec’s current CFO) and Rod Marlin (its executive chairman), realizing that this was the opportunity they had been waiting for – a platform they could use as a base to acquire more companies and work towards their ultimate goal of creating a billion-dollar business.
– John Stevens
In May of 2011, they acquired those Flint assets and rebranded their public capital pool company, EIS Capital, as Entrec (Energy, Transportation, Rigging and Cranes). And they didn’t stop there. In the last three years, 13 more acquisitions totalling more than $200 million have helped this heavy-hauling and crane business expand both geographically and in operational scale.
“All that Entrec did when we acquired it was heavy-hauling on conventional trailers,” says Stevens, sitting in his third-floor office in Entrec’s new, 100,000-square-foot headquarters in Acheson. “They only had two locations – Spruce Grove and Calgary – and what we knew from day one was that we needed to grow the business. We wanted to be in the crane business, and we also wanted to be in the oil sands to get more maintenance-type work.”
In 2011, Entrec had revenue of around $11 million, but by 2012, revenue had reached an astounding $132.5 million. In 2013, it jumped to $212.9 million and at press time, a projected $270 million was expected for 2014. It hasn’t just been acquisitions that have grown the business, however. Stevens is a strong believer in organic growth and the company has spent upwards of $150 million adding cranes, new services like engineering, and new equipment.
The company now services major clients like ESSO, Imperial Oil, Husky Energy and Cenovus Energy in Western Canada’s multibillion-dollar oil sands as well as companies operating in the Bakken oilfields stretching into North Dakota. It also works in the liquefied natural gas space and with clients in refining, mining, petrochemical, infrastructure, conventional oil and gas, pulp and paper, and power generation.
Entrec is hardly alone in the heavy hauling and crane business, however, and Stevens is quick to say that he welcomes competition. “What sets us apart from our competitors is our engaged employees delivering safe service. We also have a large fleet, so we have scale, and an engineering department that helps deliver innovative solutions, but if you want to see the big difference between us and the competition, it is the fact that we are safe, have engaged employees, innovative solutions and deliver excellent service. We live our core values, we believe in them and believe that they are the formula for growth in this industry – being engaged in the communities and environments that we operate in, and treating everyone with respect and integrity.”
When it comes to employees, Stevens sticks to a hire slow, fire fast philosophy. He also believes that it is critical that employees understand their roles in supplying clients with the best service possible. “There are companies of all sizes where people go to work and don’t know what’s expected of them,” Stevens says. “We give them the tools to do the job. People can tell if you are just here for the money. If you really want to create a good company, you need to walk the talk.”
While Stevens admits that they pay salaries slightly above the norm for the industry, he believes the real reason they get more than 150 applicants every week is because of the company’s strong reputation and the culture of accountability and respect that his management team has created. “Everything at Entrec gets measured and managed. We put in a state-of-the-art system to ensure that everything – labour costs, maintenance on the equipment, anything that is scalable – gets measured, and that is critically important. Performance management is really critical so that you’ve got the tools in place and are giving individuals the reports they need in order to run the business. We have done this since day one.”
It is inevitable that not every acquisition will benefit the company, but Stevens says Entrec is quick to pull out of underperforming markets. “Our very first acquisition was in Lloydminster and we decided to close that branch down in March of this year. We had other markets that were growing better and you only have so much capital. We were quick to reduce our costs where we had to.”
To ensure they don’t rely so much on construction ups and downs in the oil sands that could result in further closures, Entrec is hoping to expand its crane business in 2015 to get more maintenance, repair and operation work. “The MRO work is going to be there forever,” Stevens says. “Our business is about 50 per cent oil sands, and in the next five years we want to expand more geographically into Kitimat, North Dakota, the Gulf Coast, Grande Prairie and different regions. Scale is also critically important for being competitive in this market. You need a large fleet in this industry and we will continue to expand in the crane business. We want to be 75 per cent cranes, 25 per cent transportation.” Stevens sees an incredibly bright future ahead. “We have an excellent credit facility in place with Wells Fargo, which really allows us to grow organically and gives us a strong balance sheet,” he says. With the company’s Wildly Important Goals (WIGS) in place for 2015, and the location of its head office on the edge of the Yellowhead Highway increasing visibility, Stevens hopes to take Entrec worldwide over the next decade.