Welcome to Spara Capital’s Fall/Winter Update Newsletter. Inside you’ll find all the Spara news that’s fit to print; keeping you updated on our latest transaction news and information from Spara Capital and the marketplace.

 CEO’s Message

Happy Holidays to All! We’re almost at the “2 minute mark” of the fourth quarter and at Spara we’re inside the red zone and “liking the read” on a number of files and new initiatives.  2014 has been an extremely busy year both at Spara Capital and in the Canadian mid-market in general. A number of forces are driving this activity and creating a climate conducive to transactions, namely; a push by US strategic and PE buyers into Canada on the back of our slightly weakened Canadian dollar and an increase in debt multiples and banks’ appetites for lending.

At Spara our team is hard at work closing a number of files and we’re seeing a number of new prospects on both the buy and sell side.  We’ve made a change to our senior management team and we are launching exciting new things in our portfolio businesses.  We are expecting 2014 to wind up as one of our strongest years to date and see no signs of things slowing into 2015.

We hope to see all of you in the coming weeks as we head into holidays, but always look forward to touching base to discuss your plans, strategies, vision, concepts or ideas for growing or exiting your business!

Jason Sparaga, CEO & Founder, Spara Capital Partners

 Transaction Update

Oakville Hydro Corporation Acquires Municipal Engineering Firm UTS Consultants

Spara Capital was the exclusive advisor for the follow-on acquisition of UTS Consultants Inc. by Oakville Hydro Corporation (OHC), in pursuit of its construction and related services growth strategy.

“UTS Consultants are emerging leaders in utility engineering services,” said Scott Mudie, Chief Operating Officer from OHC’s Competitive Energy Services Group. “Their reputation as highly-competent and trusted engineers aligns with our core values and their complementary service offerings provide significant synergies and business development opportunities for our existing group of companies,” he added.

 This is the third transaction for OHC with Spara Capital Partners in the organization’s construction and related services growth strategy. In June 2013, OHC purchased St. Catharines based PVS Contractors Inc., which was followed closely by the December 2013 acquisition of London-based G-Tel Engineering. PVS and G-Tel were acquired to complement and grow OHC’s original platform start-up; El-Con Construction Inc., El-Con Construction specializes in underground utility infrastructure construction services and overhead telecommunications installations.
“The Management team at OHC have found their groove in both acquisitions and post transaction business alignment, which in combination makes them a growing force in the utility services space,” continued Waxman.
“Spara has been integral to the execution of our acquisition growth strategy” commented Mudie, “They offer a rare value proposition; with their direct operational experience through affiliate company Spark Power, Spara Capital understands the important and sensitive issues facing buyers and sellers in the energy services space. They helped lead the acquisition process from start to finish and were tactful at guiding both parties through the process to a successful close. We look forward to our ongoing relationship with Team Spara”.

Team Updates

Senior Team Shake-Up: Eric Waxman to President, Jason Sparaga as CEO

The votes have been counted and we have a new President! Spara’s Managing Director Eric Waxman has been promoted to President.  Eric, who has worked closely with founder and CEO Jason Sparaga for the past 15 years initially as employee then as partner, has assumed the President role. His mandate and focus will be on business development, deal origination and operational oversight of the firm. Eric has lead the operational and deal execution portion of the business for the last number of years. This advancement will allow him to focus more time and effort on other areas of firm development. Jason will maintain his leadership role as CEO and participate in business development and deal origination, but his primary focus will be on strategic oversight and managing key relationships. This move will also free up Jason’s time and focus to continue growing Spara’s portfolio business; Spark Power. Congratulations to Eric!

New Full Time Hire: Anthony Marotta

We are pleased to Report that perennial co-op stalwart and Brock University star-student Anthony Marotta will join Spara Capital fulltime in January 2015 in the role of Analyst following completion of his undergraduate studies. Anthony has been a significant asset to the team through two co-op education placements and has demonstrated both technical proficiency and a tenacious work ethic. He has dominated the Canadian and International Business Plan Competition scene and while we’re delighted to have Anthony join us full time. We’re confident his business plan competitors are happy to see him leave! Congratulations Anthony, we expect big things!

Not On My Watch: Pamela Johnson-Smyth to Office Manager

We’re pleased to announce the promotion of Pamela Johnson-Smyth to Office Manager for Spara Capital and Spark Power. In just over a year Pam has proven herself to be an administrative force for the Spara/Spark team and a friendly, dedicated professional to clients. Pam has the uncanny ability to snatch order and calm from the jaws of chaos and drives the office culture and composure.  A well-deserved promotion, Congratulations Pam!

Current Mandates

We continue to progress a number of active mandates that we are either presently in market with, or are in the process of bringing to market, and would be pleased to discuss these with qualified financiers, investors or prospective acquirers:

  • Divestiture of a scalable and validated student information services (“SIS”) technology product focused on a significant and niche post-secondary student market.
  • Divestiture of a systems integration, cloud services product service business.
  • Shareholder buyout and equity recapitalization of a large North American full-service outdoor media business.
  • Divestiture of an Eastern Ontario construction business active in the heavy civil/infrastructure sector.
  • Add-on Acquisition Search mandate on behalf of a (US) Private Equity-backed Canadian Portfolio Company in the flooring distribution business.
  • Targeted acquisition of an underground and on-ground power and utility business.

Portfolio Company Update

Spark Power Corp

Spark Power has undertaken a major reorganization and branding exercise to align and better reflect the direction of the business in light of recent acquisitions and growth.  The streamlined business, operating along three distinct groups (see below) is well underway to becoming a National leader in the power and utility space. Spark Power has a core management team; a solid market position; and an approach that resonates with customers that proves it is well equipped to realize this ambitious goal.  In less than five years, the Spark Power team has achieved much including:

  • Establishing itself as an industry leader and pioneer in the renewable energy and community power sectors in Ontario;
  • Growing to nearly 80 employees in Ontario, Quebec and Alberta providing around the clock service and managing critical infrastructure in both traditional and renewable power;
  • Acquiring, developing and selling its 14 MW Sunny Shores project, a complicated and difficult initiative requiring mastery in negotiation, project management and finance;
  • Transition of Northwind Solutions into the Province’s leading renewables’ operations and maintenance (“O&M”) business;
  • Acquiring Rondar Inc., a leading provider of high voltage maintenance services based in Hamilton, Ontario.
  • Establishing the two largest renewable energy co-operatives in North America; AGRIS Solar Co-operative, comprised of approximately 1,200 farmers and rural landowners and the Green Energy Co-operative of Ontario (“GECO”) a major presence and leader in the Province’s community power movement.
  • Successfully negotiating with the Ontario Ministry of Energy on behalf of AGRIS Solar Co-op and other constrained microFIT contract holders to create the hugely successful Solar Gardens program;
  • Developing close working relationships with key government bodies and agencies including; Ontario Power Authority, the Minister of Energy, the Minister of the Environment, and the Office of the Premier, and several hydro companies including Oakville Hydro and Hydro One.

The business will now operate in three distinct business groups; (a) Spark Solar Group, our development and asset management group; (b) Spark Power Services; the operations and maintenance (“O&M”) side of the business comprised today of Northwind Solutions; our renewable energy specialists and Rondar Inc., Canada’s power reliability specialists and (c) Spark Energy Canada Corp, a natural gas and electricity marketing business.

In Other News

ACG-Capital Connection 2014

ACG Toronto’s 12th annual Capital Connection,held on November 11th and 12th at the Allstream Centre was a huge success and Spara Capital was proud to be a key part of this important event again this year. The annual event is Canada’s largest and most prominent debt and equity marketplace and brings together mid-market company executives, business owners, intermediaries and service providers with influential executives from Canadian and US private equity firms, banks and specialty financial institutions. Jason Sparaga Co-Chaired the event alongside Darin Brock from Canadian PE Fund, Torquest Partners, and Eric Waxman and Graeme Blair participated on the event’s organizing committee.  For more information on ACG’s Capital Connection, visit www.acgcapitalconnection.ca

Volun-Teaming for Autism:  Spara Capital Joins Spark Power In Unique In-Kind Donation

In late September, the Spara Capital team joined members of its portfolio Companies, Spark Power (including Spark Solar and Northwind Solutions) in a unique and fun approach to corporate social responsibility we have affectionately dubbed “volun-teaming”.

For the past three years, Spara Capital and Spark Power have supported Unity For Autism’s annual golf tournament in a number of ways. We have provided cash sponsorships, we’ve entered foursomes and invited our network of clients and friends to do the same. However our most significant contribution involves the volunteer participation of some 30 members of the Spara/Spark Power team as tournament volunteers. Together the Spara/Spark Power contingent forgo a day at the office to assist tournament organizers in all areas; from greeting guests on arrival; to managing on-course activities and events; to hustling guests to buy raffle tickets at the after-party.

In our quest to be responsible corporate citizens and have also encouraged our team members to do the same on an individual level; we encourage them to share their skills, expertise and energy with not for profit groups in the community. When tournament organizers suggest getting volunteers as a major headache each year, our teams jumped into action and came to us with a plan to volunteer en masse. The event has become one of the most fun days of the year at Spara and Spark and has become a huge team builder. For more information on Unity for Autism, visit www.unityforautism.ca

Spara Protects the Five Hole with Holiday Video and Corporate Gift

Jason Sparaga, CEO of Spara Capital Corp is pictured with Rocco Rossi, Executive Director of Prostate Cancer Canada (“PCC”) and Andrew Clark, Co-CEO and Founder of Spark Power during the presentation to Rocco Rossi of a $2,500 Holiday Gift in support of PCC’s Protect the Five Hole Campaign.

“We’re pleased to support Prostate Cancer Canada,” said Jason Sparaga. “Prostate Cancer is the most deadly cancer among Canadian men and can be difficult and uncomfortable to discuss.  So we invited PCC in to speak to our team and encourage others to do the same,”

“Given that hockey is such a big part of our culture at Spara/Spark, the Protect the Five Hole campaign felt like a great fit for our annual holiday gift,” he added.

Sparaga invites readers to stay tuned as Spara, Spark and PCC are already working together on a number of new hockey initiatives designed to bring attention this deadly disease.

Prostate Cancer Canada is a national foundation dedicated to the elimination of prostate cancer through, research, education, support and awareness.  For more information visit www.prostatecancer.ca