A Business Point of View

The Millers Expand Parts for Trucks Nationally

A business story that has been somewhat under the radar is the recent expansion of Parts for Trucks through a reverse takeover of Western Canada based Fleet Brake in 2022. Parts for Trucks is now the largest coast-to-coast company in its sector in Canada, focused on servicing heavy duty and commercial trucks. Importantly, the company is headquartered in Dartmouth. The importance of head office jobs in the region is not well understood, both in terms of the well-paying jobs and tax revenues created within these communities with head offices.

Background

Parts for Trucks was founded in 1919 in Nova Scotia by Harold Spencer and Harry Richard. At the time of its founding, there were only about 10,000 registered vehicles in the province, of which 1,000 were commercial. The original company was known as Scotia Equipment. In the early years, Parts for Trucks was focused on the trucking industry in Atlantic Canada. In 2017, the Raymond family, who had owned Parts for Trucks since the early 1960s, sold the business to Corey and Brett Miller, who at that time owned well-known Miller Tire. Initially, the Millers felt the acquisition of Parts for Trucks would provide synergies with Miller Tire but eventually decided to sell Miller Tire to focus their attention on growing Parts for Trucks. Their first acquisition occurred in 2019 when they bought a company with three locations in Ottawa/Gatineau. At the time of the acquisition of Fleet Brake, Parts for Trucks had fifteen locations mostly in Atlantic Canada. With the acquisition of Fleet Brake, the company more than doubled in size.

The Acquisition of Fleet Brake

The Millers saw the opportunity to consolidate the sector. As Corey Miller, the CEO of the company recently told us on the Insights Podcast, the turning point for the company was teaming up with Rob Normandeau at Seafort Capital. Seafort Capital is a venture capital company, backed by members of the McCain and Sobey families, that has a longer point of view than most venture capitalists. Armed with the support of Seafort Capital, the Millers approached Fleet Brake, a Western Canadian based company headquartered in Calgary. Fleet Brake had recently lost their founding and dynamic CEO, John Bzeta, prematurely creating an immediate void in the leadership of the company. The family were looking for a buyer as none of its family members had interest in taking over the company. Fleet Brake was actually larger than Parts for Trucks at the time. With the financial backing of Seafort Capital, Fleet Brake was purchased in 2022. With the acquisition, the combined companies instantly became the largest company in Canada with coast-to-coast presence with 30 locations and two major distribution centres, one in Calgary and one in Dartmouth.

The Challenge of Integration

The Millers spent considerable effort on the integration process. One of the early challenges was the IT infrastructure to support operations. Neither of the two companies’ IT infrastructures were capable of supporting the larger entity and a new ERP platform had to be implemented. Installing a new IT infrastructure, as those who have done it know, is perhaps one of the most difficult challenges for a company to implement.

Another key challenge was combining the management teams and developing a common culture. A number of key senior managers with Fleet Brake took on national roles with the new entity. As Cory Miller indicated in the podcast, Fleet Brake had established a culture that really put the customer first, which developed incredibly strong loyalty with its clientele. Parts for Trucks is leveraging that customer service approach and philosophy across the company. Miller described that philosophy as a “relentless focus on customer service”.

The issue of rebranding the combined entity was also addressed. The Millers undertook a market research study to better understand the Fleet Brake brand, especially in Western Canada, and the possible impact on employees and customers of changing that brand, before finally deciding to brand the company nationally as Parts for Trucks. That decision has been well accepted in the marketplace and among Fleet Brake employees.

There are challenges having a national head office on the East Coast. Operating a national company from Atlantic Canada increases the time spent travelling, as well as dealing with time zone differences. One of the ways the company has addressed these challenges is by appointing senior managers at Fleet Brake to national executive roles.

What’s Next

The Millers continue to pursue growth opportunities for Parts for Trucks through acquisition and consolidation of the industry. Most recently, the company acquired another small company in Surrey, BC. Parts for Trucks is yet another example of a successful national company based in Atlantic Canada and a role model for other ambitious entrepreneurs in the region looking to expand their market reach beyond the east coast.