Although Midland Appliance was founded in 1984, it wasn’t until late 2017 that the company evolved into its current form. That was the year that Lee Methot, the company’s current President and CEO, acquired the Richmond, BC-based business. An industry veteran who had spent much of his career working for a competitor, Methot saw an opportunity and jumped on it. His plan was to transform what at the time was a small, boutique operation, into the premier brand for luxury appliance shopping in Western Canada.
After structuring a deal with the existing owner, a third-party agent introduced Methot to Ironbridge Equity Partners, a Toronto-based private equity firm with more than $700 million in assets under management that focuses exclusively on investing in companies in the Canadian lower middle-market. “I needed capital to not only buy, but also grow, the business,” recalls Methot. “I really like the team at Ironbridge. They’re smart, savvy people and we immediately hit it off.”
For Ironbridge, the decision to partner with Methot and become the majority owner of Midland Appliance was an easy one. “Lee impressed me,” says Andrew Walton, the Managing Partner at Ironbridge who led the deal. “He had a great track record, had convinced the existing owner to sell to him, and was investing a significant amount of his own money, which gave us a lot of confidence. Plus, he’d be operating in the super premium segment in a growing market, selling to developers and other serial acquirers.”
Becoming a Regional Powerhouse
Methot spent the next seven years professionalizing and expanding the business. That included deepening the management team, investing in systems and processes, and establishing KPIs. He and his team also doubled the footprint of their showrooms, opened two new award-winning facilities, and made the company more efficient by consolidating three warehouses down into one distribution center.
“I invested heavily in my team, doubling the size to over 125 people, with huge growth in our sales, logistics, purchasing, and marketing teams,” says Methot. “Ironbridge was there to help me at every step of the journey. They have tremendous expertise and helped improve the business in ways that most traditional appliance dealers wouldn’t think of. They provided the insights and acumen to help take the business from a local operation to a regional market leader.”
During this time, Midland doubled its annual revenue and increased EBITDA by 40%. “Keep in mind that this was in the face of some very serious market headwinds given all of the supply chain issues that occurred during the pandemic and the subsequent rise in interest rates,” notes Walton. “To get those kinds of results in that environment is a real testament to Lee and his team.”
In addition to its increased size and strong revenue growth, Midland also put a lot of effort into making its business sustainable by putting all of the parts in place that were necessary to keep driving the company forward. That included everything from upskilling staff to conducting the market research necessary to completely overhaul their go-to-market strategy and branding.
An Unexpected Sale Generates an Outstanding Outcome
In 2024, a serendipitous conversation became the catalyst for the next chapter in Midland’s story. An external board member of Midland happened to discuss the company with the founder of Canadian Shield Capital, another Toronto-based private equity firm. Canadian Shield’s interest was piqued and they soon suggested doing a proprietary deal to invest in the business.
“Midland was a profitable and low-stress business, so we weren’t looking to sell,” says Walton. “Plus, even if we were, it wasn’t the right time to take the business to market. But we’d been invested for more than seven years at that point and, since they were willing to do a deal on an exclusive basis and were clearly going to be a good partner for Lee and the Midland team, we agreed.”
It turned out to be a top decile exit for Ironbridge and the firm has been recognized with the PE Regional Impact Award, Western Canada, sponsored by KALOS LLP, for the work it did for the company. “Lee is an exceptional CEO and has become a real friend,” says Walton. “We’re happy to know that he’s in great hands with Canadian Shield.”
“It was a fantastic outcome from my perspective,” says Methot. “Ironbridge could have structured a deal that effectively just dumped us, but they didn’t. They were very thoughtful about what we were looking for and created a deal that really made everyone happy. My management team and I are thrilled with the way things went. As far as transactions go, it was pretty darn close to perfect.”
