Name This Company

The mystery company is the fifth largest in its industry in the world. It is the second oldest company in Canada after the Hudson Bay Company. Its history is fascinating, complex and perplexing. After many twists and turns, the current business is similar to the starting point.

The founder was a true entrepreneur, risk taker, and pioneer. He used every innovation possible in his operations and in securing key raw materials. He had good marketing sense. Building on success, his non-core interests included, lumber, transportation, hotels and banking. Politics did not escape his purview. Ownership was distributed to the public relatively recently, in 1945, providing a platform for raising capital and acquisitions. Changing regulations heralded a cross Canada expansion leading to a national presence.

By then the directors saw limited growth ahead for the domestic industry. To solve this perceived limitation an aggressive acquisition program was undertaken. Target industries were forecast to grow more quickly both in Canada and elsewhere. Ventures included home improvement centers, chemicals and industrial products. Sports made up part of the portfolio. The core business expanded in Canada through a major purchase. Leadership came from acquired companies and from a prominent Canadian ex-civil servant.

The expansion initiated by acquisition met with limited success. Predictably divestitures followed until a business franchise similar to the original remained. During the diversification process awkward deals were made resulting in dilution of the family’s ownership and much reduced influence.

By this time far reaching changes had taken place in the core industry. To regain market share and establish a global position, there seemed nothing for it, but to return to the roots, simplify and consolidate ownership. Although onerous and expensive, this strategy was successful. Consolidation and divestures brought the company back to the single original business.

This new platform allowed for three very aggressive transactions. The first, a merger resulting in a major international player followed by two acqusitions to realize an even broader global reach.

Investors can take solace in knowing and understanding the corporation’s business. A financial commitment now depends on their perception of its quality.