Arctic Group Inc.
Thursday, June 18, 1998
Arctic Stuffing Freezer With New Acquisitions
These days, the most active corporate acquisitor in perhaps all of Canada is doing his deals from a nondescript industrial property alongside the CP Rail tracks rather than on Bay Street or from a
Portage and Main office tower.
Granted, there is a small addition under construction at The Arctic Group's Henry Avenue location, but it's certainly nothing to indicate Arctic is at the forefront of a revolution in the sleepy ice-cube business.
Nor would one get an inkling that this low-key packaged-ice plant was responsible for the purchase of 19 other ice companies throughout Canada and the United States in the last 10 months.
The Arctic Group now generates about $66 million in annualized sales, making it the 722nd-largest company in the country after soft drink maker Clearly Canadian Beverage Corp., which had gross sales in 1997 of $67.6 million.
Although the incredible pace of acquisition has left a touch of weariness in the voices of Arctic CEO Bob Nagy and director of acquisitions Peggy Johnson (Nagy's sister), they are far from over whelmed.
"It is safe to say we expect this pace of growth to continue for some time," Nagy said without a hint of excitement, trepidation or exhaustion.
There have been some words of concern from financial quarters that senior management may be slightly out of its league, but overall, the capital markets have the taps turned on as full as required.
The company recently closed a private placement of $23 million in new equity - with institutional investors such as mutual-fund company BPI and Vancouver money manager Phillips Hager & North taking positions - as well as a $30-million conventional term loan from RoyNat to fund the most recent spate of acquisitions.
One of the conditions of those new financings was that the company beef up its management team. To that end, Donald Turple, former chief financial officer of Acklands Ltd., has been hired as Arctic's
new chief financial officer. A new controller will start in July and a vice-president of operations has also been appointed.
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