AIMCo Acquires Cando Rail & Terminals From TorQuest and Cando Employees

The Brandon Sun reports Cando sold to Alberta Crown corporation:

Local company Cando Rail & Terminals Ltd. has been purchased by the Alberta Investment Management Corporation, according to a release issued Wednesday morning by private equity management company TorQuest Partners.

Last year, Bloomberg reported that Cando was exploring a sale valued around $1 billion. The company became majority-owned by TorQuest in November 2018.

While the details of the deal were not disclosed, the transaction is expected to close in the third or fourth quarter of this year.

The president and chief executive officer of Cando, Brian Cornick, said in a phone interview he couldn’t discuss the terms of the accord due to a confidentiality agreement.

However, he was able to confirm that no jobs will be lost and none of the company’s operations will be affected by the purchase. 

"I see no reason why that would change," Cornick said about the company continuing to be headquartered in the Wheat City. "Brandon’s a great place. When you think about it, Cando is an industrial service. In this case, a rail speciality. But when I think about the culture of Brandon and the culture of the company, they go hand-in-hand. Do I see any changes in Brandon? No."

Cornick expressed excitement for Cando’s new owners, saying they’ll be around for a long time.

"If you’re going to grow with someone, you want to grow with someone who has a growth mindset," he said. "It’s great to see you have someone like AIMCo saying ‘We’re looking for a great infrastructure play in Canada and the U.S.’ They get our culture, they understand us in that sense. It’s nice to remain Canadian-owned."

He added that AIMCo has the capital to sustain long-term growth and continue to invest in projects like new terminals in Dartmouth, N.S., Kamloops, B.C., Sarnia, Ont., and the Sturgeon Terminal in Alberta.

That last rail terminal, Cornick said, is the largest in Western Canada.

Cando was founded in Brandon by Gord Peters and Rick Hammond in 1978. The company owns nine terminals, more than 40 industrial railyards and one short-line railroad, and employs more than 900 people.

In Manitoba, Cando employs 210 people, 108 of whom are in Brandon. Last year, the company changed its name from Cando Rail Services to Cando Rail & Terminals.

AIMCo is a Crown corporation that manages public funds and pensions.

In an email, AIMCo director of stakeholder relations Dénes Németh declined to comment.

"Unfortunately, we are limited in what we are able to share to what is included in today’s announcement," Németh said.

Last week, the Alberta Investment Management Corporation (AIMCo) announced it has acquired a 100% stake in Cando Rail & Terminals from TorQuest Partners and Cando employees:

Brandon, Manitoba – TorQuest Partners (“TorQuest”) and Alberta Investment Management Corporation, on behalf of certain of its clients, (“AIMCo”) today announced the signing of a definitive agreement that would see AIMCo acquire a 100% equity stake in Cando Rail & Terminals Ltd. (“Cando” or “the Company”), one of North America’s largest owners and operators of first and last mile rail infrastructure.

Cando, founded in 1978 and headquartered in Brandon, Manitoba, serves as a critical and integrated link in the rail supply chain, connecting large industrial shippers to the Class I rail network. The Company operates an inter-connected network of 40+ industrial railyards, nine owned terminals and one short-line railroad. This network, along with 900+ employees and 100+ locomotives, allows Cando to deliver significant benefits to both shipper-customers and Class I partners. The Company, long a proponent of the benefits of broad-based employee ownership, has more than 400 active employee shareholders, who collectively own 25% of the business. There will be no changes to the company’s operations or management as a result of the transaction, and Cando remains committed to investing in its rail infrastructure in order to enhance customer service.

Since 2018, TorQuest and Cando management have overseen a dramatic transformation of the business. On an organic basis, revenue more than doubled and EBITDA more than tripled. This growth was enabled by significant capital investments, in support of the Company’s shipper-customers and Class I partners, to build out the Company’s owned rail infrastructure. In expanding their owned network of rail terminals, today more than 60% of the Company’s EBITDA comes from owned assets as compared to less than 40% prior to TorQuest’s investment. To support these asset additions, the company had to invest meaningfully in its people and resources, adding over 400 new employees over this period, many of whom also became shareholders in the Company.

AIMCo is a global infrastructure investor with significant experience in the transportation sector including as part of a consortium of institutional investors that acquired the Porterbrook Group of companies in October 2014. Porterbrook has been a stable feature of the U.K. rail network for more than 25 years as the owner of nearly a third of Britain’s rolling stock. With the support of AIMCo, Porterbrook has become a recognized leader in innovation and sustainable rail practices, adopting technologies that will reduce nitrous oxide emissions and hydrocarbons, while partnering to develop the low-carbon technologies of tomorrow such as HydroFLEX, the U.K.’s first hydrogen-powered trains.

"Cando is the type of platform investment that has become the hallmark of AIMCo's infrastructure portfolio. With this investment, our clients add one of Canada’s most successful rail platforms to their infrastructure portfolios,” said Ben Hawkins, Head of Infrastructure, Renewables and Sustainable Investing at AIMCo, “We believe in Cando’s incredible potential and look forward to collaborating with their exceptional management to realize a continued track record of growth.

“Our investment in Cando exemplifies TorQuest’s strategy of partnering with great people and investing in our businesses to achieve exciting results” said Jonathan Fraser, Partner at TorQuest. “Cando is a wonderful business, with wonderful people, and it has been a pleasure for us to partner with Brian Cornick, Steve Bromley, and all of the employees and employee shareholders of Cando. We have seen first-hand the positive impact that employee ownership can have on business performance and culture. A sincere thank you to every person on the Cando team for helping to achieve a great result for TorQuest and our limited partners in Fund IV.”

Brian Cornick, President & CEO of Cando said, “TorQuest has been an excellent partner for us. Their commitment to investing in our business and our people has provided Cando with an exceptional platform for continued growth and success. We are delighted with the success of our partnership with TorQuest and excited about the next chapter of our business evolution in partnership with AIMCo. We look forward to continuing to support our customers and benefitting from AIMCo’s considerable experience, relationships and resources.”

The transaction, which is subject to customary regulatory approvals, is expected to close in late Q3 or Q4 2022. Financial terms of the transaction were not disclosed.

Wells Fargo Securities, LLC served as the lead financial advisor to Cando and TorQuest, and Northborne Partners, LLC also served as a financial advisor. Torys LLP and MLT Aikins LLP served as legal advisors to Cando and TorQuest.

RBC Capital Markets served as an exclusive financial advisor to AIMCo on the transaction. Stikeman Elliott LLP, Mayer Brown LLP and Fletcher & Sippel LLC served as legal advisors to AIMCo.

About TorQuest Partners

Founded in 2002, TorQuest Partners is a Canadian-based manager of private equity funds. With more than C$3.5 billion of equity capital under management, TorQuest is currently investing from TorQuest Partners Fund V, a C$1.4 billion fund that closed in March 2020. TorQuest invests in middle market companies and works in close partnership with management to build value. To learn more about TorQuest, please visit

About Alberta Investment Management Corporation

AIMCo is one of Canada’s largest and most diversified institutional investment managers with $168.3 billion of assets under management as at December 31, 2021. AIMCo was established on January 1, 2008, with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 32 pension, endowment, and government funds in the Province of Alberta.

About Cando Rail & Terminals

Cando Rail & Terminals is Canada’s leading provider of specialized rail operating services that allow industrial shippers to optimize their supply chains and connect to Class 1 railways by leveraging Cando’s operating capabilities and network of owned multi-purpose rail terminals. The company provides a wide range of rail services including short line operations, industrial switching, material handling, terminal & transload services, railcar staging, train assembly, and related services. Fully embedded in their customers’ supply chain, Cando Rail & Terminals ensure their customers’ products get to where they need them, when they want them.

For more information, please contact:

As stated above, details of this transaction are not provided but Bloomberg did report in November that the company was exploring a sale for around C$1 billion. 

I think the critical financial points are that along with TorQuest Partners, one of the best private equity funds in Canada, Cando Rail & Terminals was able to more than double revenues on an organic basis and EBITDA more than tripled. 

More importantly, is what Cando's CEO Brian Cornick said about AIMCo: 

"If you’re going to grow with someone, you want to grow with someone who has a growth mindset," he said. "It’s great to see you have someone like AIMCo saying ‘We’re looking for a great infrastructure play in Canada and the U.S.’ They get our culture, they understand us in that sense. It’s nice to remain Canadian-owned."

Now, take the time to read more about this company on its website here and below:

Problems Need Solutions

Today, more than ever, industrial shippers are reliant on an efficient, economical, and reliable supply chains.

However, most don’t have either the time, resources, or expertise to create the right solution for their needs or run it in a cost effective, efficient, and safe manner.

That’s why, since 1978, Cando Rail & Terminals has been creating complete, custom rail solutions for our clients across North America. Our specialized rail operating services allow industrial shippers to optimize their supply chains and connect to Class 1 railways by leveraging our operating capabilities and network of owned multi-purpose rail terminals. This enables clients to reduce costs, increase production and concentrate on what they do best – running their business. 

A Partner You Can Trust

At Cando Rail & Terminals, we are as invested in our clients’ success as they are.

We work as part of our clients’ teams, integrating into their operations. We will create a complete and custom solution for all their rail supply chain needs. Fully embedded in the supply chain, we always ensure our clients’ products get to where they need them, when they want them.

Health and Safety Comes First

From our early days salvaging rail track, we now handle nearly 2 million railcars a year, containing products worth $58 billion, helping transport them across North America.

However, no matter how much we’ve grown, our award-winning safety culture remains our top priority. We are committed to protecting our people, property, communities, and the environment from any adverse effects related to our operations.

A Personal Service

Cando was established more than 40 years ago by Gord Peters and Rick Hammond.

They built the business by focusing on customer satisfaction, employee development, innovation, and, above all, safety. Today, the company has more than 925 employees across North America but we haven’t lost the sense of personal investment that has made us a success – because more than half of our employees are company shareholders.


Cando got its start in rural Manitoba and a sense of community is built into the foundation of our company.

We have since grown across North America, but we are committed to maintaining that community mindedness in every region we operate and ensuring we are helping build a sustainable future. Cando’s sustainability plan is grounded in four pillars: environmental stewardship, indigenous relations, workforce/people, and community giving.

I also highly suggest you read how Cando helped The Mosaic Company:

The Problem

As the world’s largest supplier of potash and phosphate, it is key for The Mosaic Company to optimize the speed and flow of railcars in and out of the mine sites to move more product. Mosaic needed improved rail service that would create more fluidity at its mines to improve the entire operational cycle.

Mosaic wanted rail switching crews to be on hand 24/7 to provide dedicated switching and railcar mechanical service. It also wanted a rail service provider that would work alongside its team so it would understand Mosaic’s operations and could spot opportunities for improvement. 

The Solution

Cando Rail & Terminals took over the switching and mechanical services at all three Mosaic potash mines in Saskatchewan. Before start-up, Cando worked closely with Mosaic and CP to develop operating plans and facilitate the efficient movement of full loads and empty cars. CP granted Cando various operating authority on Class 1 track, including running rights along their mainline subdivision between Esterhazy and Bredenbury, approximately 23 miles. Cando has the rail experience, safety systems, and regulatory approvals to be able to operate on Class 1 main line track.

Across all mines, Cando builds unit trains that are between 75 and 170 cars long for CP to hook and haul. At Mosaic’s Esterhazy mines, Cando also works with CN and builds up to 205 car export trains. The crews also perform a mandatory air brake test on each car and make sure the trains are ready for the Class 1 railway. All the work is done in advance by Cando, which allows the Class 1s to move the product to Mosaic’s customers faster and improve cycle times on the railcars.

The Impact

Cando now moves more than 20 million tonnes of potash a year, handling 90 per cent of all potash produced in Canada. Since working with Mosaic, Cando has helped the company achieve numerous production records.

Cando also saves CP time in Esterhazy; CP crews can reduce their yard time on through trains from three hours to one hour and 45 minutes, saving an average of 80 hours of train speed per month. Since Cando took over switching at all three Mosaic mine sites, the Class 1 railyards are more fluid and less congested with cars waiting to be switched and air brakes tested.

Another case study worth reading is how Cando helped Parkland Fuel Corporation with its needs through its Hamilton Terminal:

The Problem

As one of North America’s fastest growing independent marketers of fuel and petroleum products, and Canada’s largest fuel retailer, Parkland Fuel Corporation needed to improve its product sourcing options. It also wanted to enhance supply reliability in the southern Ontario market, one of the highest demand areas in Canada.

With Ontario pipeline and refining capability at capacity, sourcing product by rail became the only viable solution. Fuel delivery by rail typically means building a fuel distribution terminal or bulk plant with large storage tanks, along with equipment to blend it to exacting specifications — a solution that normally comes with a high cost and a long development schedule. Parkland came to Cando Rail & Terminals in 2014 to find a more efficient and cost-effective solution.

The Solution

Cando Rail & Terminal’s concept was to design a modular and scalable rail direct-to-truck terminal that could grow with Parkland’s business but the first stage would be up and running in a fraction of the usual time. By doing this, we were able to minimize the initial start-up costs along with the project lead time while, more importantly, not compromising on environmental protection and safety features.

Finding a suitable location for a terminal facility was key to the success of the project. Working with Parkland, we sourced the land and helped work out the necessary the details of the land acquisition and agreements. With the location secured, we moved onto the full design of the facility, supplementing our in-house engineering, transload logistics, rail and design expertise with experts from companies across Canada. We teamed up with civil and environmental engineers to ensure the site would meet or exceed all necessary standards, including complying with Ontario’s strict new regulations regarding spill prevention, air emissions and safety. Throughout the build, we worked closely with regulators to ensure the finished facilities complied with legislation. Working with long-term supplier, Hall Technologies of Calgary, we developed and designed customized modular transload units that can work both as straight product transloaders, or mixed product blenders. This equipment is among the most advanced of its kind for this type of operation, and currently the only direct rail to truck ethanol blending equipment being used in Canada.

The Impact

From this ground-breaking approach, we designed, financed, built and operate a rail terminal that is the most advanced facility of its kind anywhere in Canada, with added inventory control features such as RFID badges that allow for automated bill of lading control

In December 2015, less than 12 months after the initial concept, we moved into Phase I trial operations and were full operational 11 months later. Operations and throughput continued to meet or exceed expectations which resulted in a further Phase III expansion by summer 2017. 

In short, the more case studies your read, the more you realize that Cando is an infrastructure solutions company that responds to the needs of its customers. 

Just like it states on its website: "We optimize supply chains  and connect industry to Class 1 railways."

Ben Hawkins, Head of Infrastructure, Renewables and Sustainable Investing at AIMCo states this is in the press release above:
"Cando is the type of platform investment that has become the hallmark of AIMCo's infrastructure portfolio. With this investment, our clients add one of Canada’s most successful rail platforms to their infrastructure portfolios. We believe in Cando’s incredible potential and look forward to collaborating with their exceptional management to realize a continued track record of growth."
I realize some may find Cando is more of a private equity play but I think it's more of an infrastructure play, so I like the fact that's where AIMCo put it in its portfolio.
As it states in the press release, the company is one of North America’s largest owners and operators of first and last mile rail infrastructure.

In other AIMCo news, the Globe and Mail ran another hit piece today on how the pension investment manager paid $3.6-million to departing executives after $2.1-billion loss.
I will only quote Mark Wiseman, AIMCo's Chair from that entire article:
There’s nothing here that is not normal course under either employment law or contractual arrangements that people have,” Mr. Wiseman said in an interview Monday. “And those contracts are what one would expect to see in the public pension sector in Canada. This is pretty standard and it’s what you’d expect to see when you’re, frankly, in a change management scenario.”
Termination clauses for senior executives and other leaders are standard at every large Canadian pension manager. Moreover, they are publicly available in the Compensation section in each annual report they publicly release.

You can't expect to hire highly qualified people without providing them a standard termination clause which is in line with industry standards.

Again, these aren't government civil servants, they are highly qualified finance experts who are managing billions in assets and they are expected to produce results over the long term.

Reporters need to take a lot more time researching and understanding how compensation at Canada's large pensions is determined. The information is publicly available in each annual report.

Stating figures on how much each CEO at Canada's Maple Eight receives without providing proper context is very silly and only serves to undermine the very organizations our pensioners rely on for a safe and secure pension.
Lastly, AIMCo came out on Twitter recently to confirm it took losses on its investment in Vue, the European movie chain which recently filed for bankruptcy that it acquired in 2013 along with OMERS but that it represents a very small part of its PE portfolio and it hasn't impacted the stellar long-term performance of this portfolio:

As I recently stated here, both OMERS and AIMCo took full writedowns on this investment two years ago, so the latest development will not impact their respective private equity portfolios at this time. 

Alright, let me wrap it up there and once again recommend you read AIMCo's 2021 Annual Report which was released at the end of June for more details on all its activities.

I trust Cando's new owner will be a great long-term strategic partner helping it grow its revenues and earnings over the long run.

Below, learn more about the Cando spirit and why its employees embody the spirit of Safety, Leadership, Integrity, Ownership, and Innovation. Also, learn more about Cando SwitchSmart and how it helps ensure the safety of its employees and the public.