Originally Published on Huddle: http://huddle.today/from-the-military-to-business-how-frederictons-leading-edge-geomatics-scored-a-big-investment/
When Bruce Hogan, Bill Kidman and William Lowry retired from the Canadian military about 10 years ago, they came home with an idea of how to apply what they learned overseas in the business world.
The three men had worked in geomatics in Afghanistan and they knew those skills would be applicable here. They just weren’t sure they could build a viable business.
“We were geomatics in the military flying airborne sensors. Bill Kidman’s last mission was to fly the entire country of Afghanistan [and do] aerial photography,” says Hogan. “We knew what we were doing in terms of the product. Business was a bit of a stretch for us. We had to learn a lot, but we knew how to make the actual systems work and data work.”
But the team did make the business work. Ten years later, Leading Edge Geomatics is a New Brunswick company providing aerial survey and geomatics services across North America. Based in Lincoln, Leading Edge has a fleet of four aircraft and seven digital sensors and offers customized solutions to clients across different industries including energy, forestry, and mining.
Hogan says Leading Edge has worked for companies such as NB Power, Nova Scotia Power and Hydro One in Ontario. On the forestry side, they work with J.D. Irving and other forestry companies in the Maritimes. Leading Edge also has clients in the United States, including Michigan, Texas, Virginia and South Carolina.
What makes the company stand out from others in the industry, Hogan says, is their specialty in the forestry sector. The company has developed its proprietary Enhanced Forestry Inventory management solution. It combines lidar terrain and surface products to offer forestry professionals a mix of forest metrics and terrain data that lead to an improved management strategy and operational efficiencies.
“It’s kind of changing the way for forestry interpretation of the land base,” says Hogan. “We definitely have some intellectual property around forestry that makes us very unique.”
The company’s specialties and potential for growth recently caught the attention of Novacap, a private equity firm based in Montreal and Toronto that has over $2.26-billion of assets under management. The firm announced this month that it made a “strategic investment” in Leading Edge. The details of the investment are not being revealed publically, but founders Hogan, Kidman and Lowry, will continue to operate the business.
While they don’t reveal the size of the investment, Hogan does say it gives them enough capital to double the size of the company.
“It’s a significant investment for us because it allows us to grow. Capital is always not simple to get, so it allows us to have the ability to have unlimited amounts of capital,” says Hogan.
“Our hope is to grow this by double. We’re 60 people now and hopefully [we’ll have] 120 people in the next three to five years. They have the capital to make all that happen. The plane and the sensor itself is like $2-million, so it takes a lot to make that happen.”
Yong Kwon, a partner at Novacap in Toronto, says the firm was interested in Leading Edge because of their story and growth potential.
“We were immediately attracted to the company because it looked like a niche business where they had a differentiated solution,” says Kwon.
“We thought, ‘hey, this is a really neat story.’ Then they had the financials to back it up. Very nice growth and a very profitable company, but they really they hit a constraint in terms of access to capital to buy equipment, to hire people and so on.”
Like all investment firms, Novacap’s goal with Leading Edge is to make a profit. Kwon says they plan on doing this by providing Leading Edge with not just capital, but guidance too.
“Our return is the exact same as management’s return. We hold the same shares that they hold and whatever percentage return we benefit from, they will as well. It’s a true alignment,” says Kwon. “At certain firms, they have very structured investments. They’ll say, ‘we want to make our dollar before you make your dollar.’ There are scenarios where those turn very ugly. We don’t like to put ourselves in the situations. We take a true partnership approach.’”
Hogan says the Leading Edge team is excited to take their company to the next level, while still being based in New Brunswick.
“We take great pride in being in New Brunswick and having a fairly substantial company and getting Montreal and Toronto involved with us to try to turn this into a bigger entity in New Brunswick,” he says. “It’s really exciting to try and actually grow and have the capital investment to be able to grow.”