Private equity-backed Weatherhaven is helping communities combat COVID-19
Photo: Greenland community shelter as part of its government’s plan to battle COVID-19 outbreaks. Courtesy: Weatherhaven.
When the COVID-19 pandemic hit earlier this year, Weatherhaven worked quickly to reconfigure its portable infrastructure solutions for use on the front lines of battling the disease.
The Vancouver-based company was already a leading global provider of rapidly deployable shelter systems used by the military, resource camps and medical response agencies.
The pandemic inspired Weatherhaven’s research and development team to design and develop a portable isolation ward to serve COVID patients and protect health care workers. The structures are built with pressured air and high-quality Heating Ventilation and Air Conditioning (HVAC) and High-Efficiency Particulate Air (HEPA) filtration systems to keep it purified.
“It’s significantly safer because fewer COVID molecules hover in the air, thereby reducing viral load,” Weatherhaven CEO Ray Castelli says.
The medical isolation ward solutions, which can be set up and taken down in mere minutes, are being used in medical facilities in more than 15 countries worldwide in North and South America and the Middle East.
It’s the kind of innovation that has helped Weatherhaven, founded in 1981, expand from its roots as a provider of rugged outdoor tents for mountaineers and mining companies. The Canadian military became a key customer in the early days, which led Weatherhaven to develop a line of portable shelters that included the sturdiness of a container with folding flexibility of a tent. The product then caught the attention of the U.S. military, more resources companies as well as humanitarian organizations looking for robust, redeployable structures to withstand extreme weather conditions in countries worldwide.
Castelli joined the Weatherhaven board in 2007 and was tasked with putting together a five-year strategic plan to grow the business.
Shortly after, he was hired as CEO to execute the plan, which included Weatherhaven expanding its global production footprint and developing new products, including tactical shelters that could withstand hurricanes, heavy loads of snow and extreme hot and cold temperatures. Demand for these more robust shelters was on the rise and, around 2013, the company learned that the Canadian government would be looking for a major procurement program to replace its tactical shelters.
While Weatherhaven had reached about $50-milion in revenue at the time, a program that size “was still out of our league,” Castelli says, adding the company also didn’t have the balance sheet to be a contender for the project. “We wanted to bid, but we needed funding the make it happen. There was no way the Government of Canada was going to give a $300-million project to a company our size.”
Instead of giving up, and with a bit of time before the competitive bid process began, Weatherhaven went looking for a financial backer. The company considered bringing on a strategic investor, but “didn’t want to give away the crown jewels to a strategic,” Castelli says.
Instead, the management team held talks with a handful of private equity firms before choosing to partner with Fulcrum Capital Partners, with offices in Vancouver and Toronto, which took a majority interest in Weatherhaven. The transaction allowed the founders, Jim Allan and Brian Johnston, both 68 years old at the time, to capitalize on the growth achieved to date and transition away from day-to-day management of the business.
The rest of the management team, including Castelli, remained with Weatherhaven under the new private equity ownership structure and continued to run the business. Castelli said the team chose Fulcrum as a partner because of its Vancouver base, local market knowledge, and strong track record.
Weatherhaven then went on to win that massive Canadian government contract in 2017, valued at about $350-million.
“We have a smart group of executives, some great engineering and innovative designers, but there is no way we would’ve won that major project if we didn’t have a partner that was able to provide us with the balance sheet and the strategic vision to scale the business,” he says. “We saw the potential to take the company to another level and we needed the right partner to support it.”
Fulcrum didn’t just come with the funds, Castelli says, but the experience and strategic insight to help Weatherhaven cope with volatility in the business a few years ago, driven largely by the drop in commodity prices, including oil and gas and some metals. Resources companies pulled back on drilling and, as a result, the need for outdoor shelters to work in.
“Fulcrum helped us rethink our strategic plan and retool the business,” Castelli says.
One major move was a more capital-efficient approach to manufacturing and a shift towards the design and engineering and major program management. Today, most of Weatherhaven’s manufacturing is outsourced to its partners in places like South Africa, the Middle East and South America.
“That gave us a lot more flexibility and variablized our cost structure so we could grow rapidly, while protecting the downside,” Castelli says. “We were lucky to have the strategic brainpower or Fulcrum to help us rethink our business model on the fly, while at the same time trying to win the major Government of Canada program,” he says.
Today, the company has about 140 employees and has doubled revenues to more than $100M, a significant portion coming from the recently created COVID isolation wards. The company’s products have been deployed in 95 countries across seven continents for everything from medical units and peacekeeping missions to climate change research and commercial use.
Castelli says his team is honoured to be doing work that contributes to so many good causes around the world, including most recently the COVID-19 pandemic.
“Whether it’s COVID, peacekeeping or climate change research, our people are very proud of the work we do to make those things happen,” he says.