When they made the choice to grow their company, CustomAir turned to Private Equity
It was an interest and expertise in mechanical services that led Peter Harteveld to co-found CustomAir in his Metro Vancouver area basement nearly 30 years ago.
Harteveld started the company in 1991 with another mechanical services technician, Peter Whiten, with a goal to provide not just refrigeration but also heating, ventilation, and air conditioning (HVAC) and plumbing services to large commercial and industrial clients.
“We were really good troubleshooters. That has been our mainstay from the beginning,” says
Harteveld, now CEO and Managing Partner of the Port Coquitlam, B.C.-based company formally known as Custom Air Conditioning Ltd.
The company’s first big customer was IKEA and a handful of forestry firms in need of their services. After surviving the forestry slump in the late 1990s, CustomAir began to expand across different sectors, including mining, real estate, agriculture and health care. The company’s growth spurt in the early 2000s helped it survive the global financial crisis in 2008-2009 and continue its expansion.
By about 2016, Whiten was ready to retire from the business and Harteveld decided to look for ways to continue the growth trajectory. His process included hiring advisors, including lawyers and experts from consulting firm Deloitte, to consider either joining forces with another HVAC company or bringing in private equity (PE) firm to help support the full-service commercial industrial mechanical services company through its next stage of growth.
In the end, Harteveld went with a PE firm that could help CustomAir on the strategic business planning side, such as mergers and acquisitions, while he focused on running the business.
“I came to the conclusion that PE was the best fit for me,” Harteveld says.
In August 2018, CustomAir announced it would partner with CAI Capital Partners. Specific details of the agreement weren’t disclosed in the release, but Harteveld has retained “a meaningful equity interest in the company.”
He also continues to lead the business and execute on its strategy of becoming the leading mechanical services provider in western Canada.
Harteveld said he went with CAI based on its “impressive track-record” of working with founder-led businesses and helping them to successfully scale their operations.
“Leadership is central to the success of an investment. When we enter a new partnership, having an engaged founder and/or CEO, like Peter, who is excited to continue moving the business forward, is ideal,” said Curtis Johansson from CAI Capital Partners. “Management is critical to taking the organization to the next level and enhancing value over the longer-term.”
CustomAir has doubled its employees to about 140 since that investment a couple of years ago, driven by both organic growth and acquisitions. For instance, CustomAir purchased Mavco Plumbing & Heating Ltd. in the spring of 2019.
“They have a strong presence in the Okanagan. It fit our growth model,” Harteveld says.
Today, the company has offices in Metro Vancouver, Whistler, Penticton, Kelowna and a satellite office in Kamloops.
Harteveld also says he has maintained a good relationship with the CAI team to date.
“They stay out of my hair unless I need something,” he says with a laugh. “As long as everything is going well, that’s what happens.”
The company has also been busy during the COVID-19 pandemic, helping its clients maintain their mechanical operations including hospitals, health care clinics and retirement homes.
Also, given the focus on proper ventilation for health and safety, HVAC services are expected to become even more critical as people head back to their offices, Harteveld says.
“We are an essential service,” he says.
CustomAir is also active in many of the communities in operates across the province, including the Lower Mainland, Okanagan, Fraser Valley and Thompson Okanagan regions.
Harteveld says many of the company’s initiatives are driven by employees, including donating food to families in need during the holidays, sponsoring kids’ sports team and supporting funding drives for charities such as cystic fibrosis and “One Night Out,” which raises funds to help homeless youth and those at risk of becoming homeless.
“We are driven by the people who work here and the initiative they want to do when it comes to community contributions and we look at that annually,” he says.
As for the company’s future growth, Harteveld says CustomAir has increased its sales by 30% over the past two years and has a plan to double its business by 2023 compared to 2018 levels.
While CustomAir will continue to look for acquisitions, Harteveld says a lot of the growth is the result of its employees’ hard work and loyalty.
“We put a huge emphasis on culture and our staff,” he says. “The growth we see organically is all because of the people who work here.”