Project Heat III

Business Overview‍

A strategic acquisition of the land housing two existing industrial operations specializing in refractory manufacturing and high-temperature equipment maintenance. This purchase secures full ownership and control over the group's operational base, eliminating dependence on external landlords and providing long-term stability for future expansion. In addition to operational control, the land offers flexibility to generate supplemental income through agricultural use or leasing, while serving as a low-maintenance, tangible asset that strengthens the group's balance sheet and long-term value position.

Track Record
Operating History: Over 15 years in continuous operation, with a proven reputation for reliability and safety in demanding industrial environments.
Customer Base: Works with major corporate clients across Canada such as cement producers, manufacturers, and energy companies, with repeat projects across multiple plants.
Scale: Generates multi-million-dollar annual revenues with consistent profitability and minimal capital requirements.
Profitability: Historically EBITDA-positive for several consecutive years, supported by low leverage and high-margin technical services.
Leadership Alignment: Founders are retaining a minority interest to ensure continuity, while new management and systems will professionalize operations post-acquisition.

Growth Strategy
Operational Expansion: Hire additional management and project supervisors to increase capacity and reduce dependence on the founders.
Infrastructure Modernization: Implement new reporting, project management, and safety systems to improve efficiency and risk controls.
Geographic Growth: Expand service coverage beyond Southeastern Ontario into new industrial regions to capture recurring maintenance contracts.
Client Diversification: Pursue larger multi-site clients while strengthening relationships with existing partners through improved service tracking and reliability.
Platform Build-Out: Integrate the business into a broader industrial services holding company, creating synergies and cross-selling opportunities across multiple industrial maintenance verticals.

Investment Overview
PE Gate and co-investors are acquiring an 80% ownership stake in this industrial services business. The acquisition represents the foundation of a new industrial services platform under PE Gate Industrial Holdings. The investment targets a base case IRR of roughly 30%, supported by strong recurring demand, high industry barriers to entry, and low competition. Long-term value creation is expected through add-on acquisitions, operational upgrades, and margin expansion.

Investors interested in reviewing the detailed Investment Memorandum and transaction terms can set up an account on the PE Gate platform to access the full document and indicate interest.

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