Strong Saskatchewan Roots With Growing Global Reach: How A PE Partnership Positioned Degelman And The Community For Growth
Six decades after building a heavy-duty rock picker in his barn in Raymore, Saskatchewan, Wilfred Degelman’s vision to build high-quality equipment to support farmers remains — only it has grown into a global company, Degelman Industries.
Today, Degelman Industries is a 200,000 square-foot operation that designs, builds, and sells more than 50 products — from rock pickers and tillage equipment to land rollers and bulldozer blades — serving farmers across North America and as far away as Russia, China, and South Africa. The company has now chosen a private equity partner to focus on Degelman Industries’ future growth.
“The company’s growth has and will continue to come from doing what we do best, which is designing, building, and delivering high-quality equipment and standing behind it every step of the way,” says Blair Flavel, president of Regina-based Degelman Industries. “That’s the key to our success in the past and well into the future.”
The expansion of Degelman Industries over the years has been constant, from the Degelman barn in 1962 to an 11,000-square-foot industrial site in Regina in 1966, and another 50,000-square-foot expansion in the 1970s to accommodate a growing roster of products. Today, the company has 170,000 square feet of production space in Regina and about 30,000 square feet in Hillsboro, North Dakota. It grew from about 20 employees in the 1960s to more than 300 today with annual sales of about CAD $150 million.
Flavel says every product is built to last and avoid breaking down, with an end goal of helping farmers increase their productivity. Products are also upgraded to include the latest technologies and to meet the evolving needs of their customers.
Flavel, who started as a production worker at Degelman 40 years ago, became a company co-owner about a year ago as part of a management buyout backed by Saskatoon private equity firm Westcap Mgt. Ltd.
The deal came about after the Degelman family was looking for a new ownership structure. After entertaining several proposals, the family landed on a deal with Westcap that also included six of Degelman’s managers.
Flavel says one of the most important reasons that the Degelman family chose Westcap as a partner was because of its commitment to maintaining Degelman’s brand and local culture and the alignment with the future trajectory of the business as it was looking for someone to continue to grow with.
“They wanted to see it go to the next level; Westcap checked all the boxes we were looking for,” he says.
The transaction, which closed at the end of 2019, will help the company expand both organically and through acquisitions in the years ahead.
“Degelman is a Saskatchewan manufacturing leader with international reach,” said Grant Kook, President and CEO of Westcap, while citing the company’s “commitment to continuous improvement, innovative product design and manufacturing efficiency” since it was founded.
“This investment will continue to drive economic growth not only in our province by fueling Degelman’s success here at home but also ensure that its innovative, high-quality, and diverse products and product lines continue to reach various sectors and markets across the world while addressing advancements in the industry including sustainable agriculture,” said Kook.
Westcap’s investors are attracted to the diversity of our portfolio including the agriculture sector – a key sector given its importance to the global economy amidst an increasing positive farm sentiment,” Kook further explained.
Paul Degelman, on behalf of the Degelman family, said the new relationship with Westcap “will solidify our roots here in Saskatchewan with a partner that understands the importance of our local culture, will foster new growth and will propel our plans to grow our brand and our business globally.”
Degelman Industries, which currently has about 300 employees, continues to introduce new products to its equipment lineup and expand its customer base through an already extensive network of dealers across the globe in Canada, the United States, Russia, Australia, Germany, Kazakhstan, South Africa and Ukraine.
The pandemic only temporarily disrupted the business, says Flavel, as the company continued to focus on product development and future growth. In addition to new products, since Westcap’s investment, Degelman has also continued to increase its employees and despite a global pandemic, added an additional 15 new personnel last year alone.
Flavel says employees may have wondered what the next step would be as ownership changed but believes the investment from Westcap has “calmed the waters and allowed employees to focus on the job at hand rather than the uncertainty of potential new ownership that may disrupt their lives. Overall, the change has been non-disruptive and very positive.”
As for the expansion: “We’re in a really good place right now and have the opportunity to keep growing.”