On June 27, the Association for Corporate Growth (ACG) held its first meeting outside of Vancouver as it launched a Lower Mainland chapter.
Described as a “group for dealmakers,” the ACG naturally held the meeting in Surrey, said ACG president Robert Napoli.
“Half of the six biggest business deals in B.C. over the past two years took place south of the Fraser River and two of these were in Surrey,” said the Australian-born Napoli, who is also founder and president of Langley-based First West Capital.
Of the top deals tracked by ACG since 2010, Napoli listed the $93 million sale of Britco Structures LLP, the $54 million sale of Dollar Giant and the 50% share of 4 Refuel Canada Ltd. bought by a private pension fund as all involving Surrey or Langley deal makers.
In April, U.S.-based Sterling Infosystems bought Surrey-based Backcheck, which is Canada’s largest provider of background checking services with 400 employees worldwide.
Napoli expects the deal velocity to accelerate.
“If you look at the manufacturing and distribution sector, Surrey has the potential to take over Vancouver as the centre for major transactions,” Napoli said. “We already see more activity [in these sectors] south of the Fraser River than north of it.”
Speaking for ACG’s bid for a Surrey-based chapter, Napoli said, “We are simply following where the business is.” He adds that a distinct business community is arising in the Fraser Valley, where people prefer to keep their business south of the river rather than going downtown.
Private deals
It is hard to quantify the size and quantity of deals taking place in Surrey, said Napoli and lawyer Mandeep Dhaliwal, a partner and financial lending specialist with Lawson Lundell LLP., because most involve private companies.
Dhaliwal, who deals with a lot of Surrey real estate transactions, said many involve “top tier” players buying land for multi-family projects, including Concord Developments, Rize Alliance, Bosa Properties, Onni Group and Adera.
Rize Alliance is in the midst of launching the largest condominium project in the province, the 500-unit, twin-tower Wave complex in central Surrey.
Napoli said he is also seeing a number of management buyouts and sales of existing businesses in Surrey as boomer owners prepare to retire.
“It’s not a tsunami yet, but a wave is building,” he said. He also knows of accountancy and insurance firms scouting Surrey for takeover targets.
Dhaliwal noted that Surrey now has most of the infrastructure needed for business, including relatively affordable housing, a Simon Fraser University campus and major highway and transit upgrades, and SkyTrain.
Beachhead
Leo Smyth, partner and Fraser Valley office leader with PricewaterhouseCoopers (PwC) noted that SkyTrain links were a key reason why PwC chose to set up in its new offices in central Surrey last year.
But it is the business potential of the Fraser Valley that is the overriding attraction.
“We came here to grow,” Smyth said, “This office is our beachhead for the Fraser Valley.”
PwC took about twice as much space as they originally needed for the Surrey office, he said, because it plans to double its 60-person staff.
PwC should have no trouble recruiting new employees, according to Smyth, who noted that young professionals are attracted by the area’s much lower prices for detached houses, which are about half that of Vancouver.
Napoli, who is working closely with the Surrey Board of Trade on ACG events, was quick to credit the City of Surrey for its role in helping deal velocity. “[Surrey] is probably the most business-friendly city in B.C,” he said.
