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Growth and Consolidation Lead to Acquisition Opportunity

St. Regis

The St Regis Group has its roots (founded in 1999 as a startup by Richard Firkser) in Award and Recognition Products and has grown to become North America’s largest supplier in this category.  The business involves the manufacture or import of award and recognition products, followed by their decoration or personalization.

St Regis’ products include beverage ware, giftware, pens, picture frames and related products for supply into the Promotional Products Industry.  In March 2016, the St Regis Group entered into discussions with ESP Promo on a potential merger. ESP Promo is regarded as the top promotional products supplier of hard goods in Canada. St Regis and ESP both identified exciting synergies that could be realized by combining the two operations.  The companies have similar customer bases; therefore a merger would increase the depth and breadth of products that they could offer to customers.  Moreover, St Regis recently completed an expansion to its Markham distribution facility such that it could accommodate the ESP business.

Finally, the owner of ESP Promo, Merrick Falkenstein, is a respected industry veteran who could bring significant expertise in sales and marketing to the St Regis organization. “We just recently cut the ribbon on our completed expansion, and we’re positioning ourselves for future growth, so the timing could not have been better,” said Richard Firkser, CEO and President of the St Regis Group. “Our two organizations complement each other nicely and this deal greatly enhances our competitive edge in the promotional industry. This merger ultimately provides our customers access to a larger, more diverse product range delivered with the same excellent service and quality they’ve come to expect from both St Regis and ESP Promo.”

The Power of a Long-Term Financing Partner Who Can Act Quickly

The promotional products industry is relatively fragmented in Canada and the United States.  Both the St Regis Group and ESP Promo have completed a number of acquisitions in the past five years in order to grow their businesses and consolidate within the industry.  Both companies recognize the value of having a relationship with an established subordinated debt lender who can provide flexible capital in order to complete and integrate this merger, as well as future acquisitions as their efforts to consolidate continue.

In addition to a long-term relationship, St Regis and ESP Promo value a financial partner who can act quickly.  Time was of the essence, and there were various stakeholders to consider.  First West Capital was able to act quickly in order to ensure that the timelines and needs of the various stakeholders were met. While St Regis and ESP Promo were not previously familiar with First West Capital, St Regis had known David Hastie, First West Capital’s Regional Director, Ontario for four years.  Richard Firkser and Harold Franks, CFO for St Regis, met several key executives from First West Capital and First West Credit Union at First West Capital’s Toronto office launch party.  This provided St Regis and ESP Promo with additional confidence in First West Capital’s ability to close the deal.

‘”We found First West Capital to be exceptionally professional in reviewing our merger financing needs,” shares Richard. “Their turnaround was extremely timely, proficient and considerate taking into account the importance of closing within a short timeline. The First West Capital team also went out of their way to complete their due diligence within an acceptable timeline and requested their legal team to assist wherever possible. Summing up, St Regis Group found First West Capital to be a professional, knowledgeable, reasonable lender with a great sense of partnership.”

“We are absolutely delighted that the St Regis Group selected First West Capital as its financing partner for the merger with ESP Promo,” said David. “This marks First West Capital’s third closed transaction in Ontario and the first since opening the Toronto office in March 2016.  Richard is a very experienced promotional products executive and he has significant acquisition experience.

The merger with ESP Promo is a great strategic fit for St Regis as ESP has complementary product lines that St Regis can sell to its existing customers.  Merrick also brings significant industry experience to the organization, which is a great win for St Regis.  The solid business plan presented by the St Regis and ESP teams helped us to put together the financing needed to meet the Group’s needs.”

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