Kluane Partners

Founders, CEOs, and Operators of medium-sized private companies face unique challenges when it comes to making strategic financial decisions for their businesses. Oftentimes these companies do not have the resources available internally to confidently make decisions that could set their operations up for both short-term viability and long-term success.

This is where Kluane Partners comes in. We offer a team of experts that have deep financial industry experience. The Kluane team has led dozens of complex financial transactions - from debt and equity capital raises, loan structure refinancing, and shareholder buyouts, to recapitalizations, working capital management and the building of robust cashflow models.

At Kluane we don't only offer a service, we partner with our clients every step along the way to help them reach their goals, because their success is our business.

If you are a founder, CEO, or owner of a medium-sized private company looking for guidance on how to navigate the corporate finance world, the Kluane team is only one email or call away. Visit klupart.com to book a meeting with our team.

The CPI numbers for September have been released and overall the index rose by 6.9% YOY, marginally down from 7.0% in August.

Food and energy continue to be the biggest contributors to the increase, although gasoline prices have dropped by -7.4% in September, making it the third consecutive month-over-month decline. In contrast, grocery prices grew at the fastest pace in September since Aug/1981, posting a +11.4% increase.

The largest contributors to food price increases have been unfavorable weather (particularly the drought in South America and Typhoon Nesat in Malaysia), higher prices for fertilizers and natural gas, and geopolitical instability.

Despite a cooling of the real estate market in Canada (growing 5.8% vs 7.4% in August), higher interest rates on mortgages are measured in the CPI calculation, which have increased on a YOY basis for three straight months.

Tuition fees also contributed to the CPI increase, rising +2.3% YOY vs last September, with the highest increase coming from Alberta (+7.7%).

Due to recent refinery shutdowns in the Pacific Northwest, BC was the only province to see an increase in prices vs August (+27%), whereas all other provinces experienced a slow down.

One of Kluane's clients, a group of companies in the medical and real-estate space, had recently been moved to the special loans group with a Canadian lender and was looking for help.

With that, the client was facing working capital issues and had difficulties servicing loans due to the COVID economic turmoil.

The Kluane team conducted a thorough assessment of the situation and found that there was an opportunity to:

1. Enhance management's capabilities
2. Improve financial transparency within the business and with stakeholders
3. Strategize the ex*****on of contractual obligations with the lender and service providers

This was a classic case in which Kluane had experience dealing with in the past, and the team was able to act swiftly to help this client and its group of companies get back to doing what they did best: growing the business.

By implementing a weekly cash flow management process for monitoring of the business health, supporting the client in executing proper contracts with its client base, and renegotiating contracts with key stakeholders, Kluane Partners helped this client refinance $26,000,000 worth of facilities by consolidating loans - reducing complexity and finding efficiencies in the process.

As a result of this robust process, the business started generating monthly recurring revenues with double digit growth and built a solid financial foundation that set them up for future success.

Overall, Canada's merchandise exports dropped by -2.9% to $65.4B in the month of August, largely due to a decrease in energy exports.

This decline in energy exports came from crude oil (-5.7%, mainly due to lower prices), refined petroleum products (-10.3%), coal (-10.5%) and natural gas (-4.9%). As a result, energy products represented roughly 28.2% of total exports in August, down from an all-time high of 30.1% in June.

In conjunction, Canada's imports fell by -1.7%, largely due to a decrease in motor vehicles and parts.

As a result, Canada's trade surplus with the world fell to $1.5B in August - the lowest observed to date in 2022.

The Q2 GDP numbers for Natural Resources were released last week by StatCan and a few interesting factors are driving some of the changes.

Overall, there was an increase of +1.8%, mostly driven by energy and the minerals/mining industries. This was mainly driven by higher utilization rates in the sector, which reached 82.6% utilization rate. This led to real GDP numbers not seen since before the COVID pandemic.

The only drawback came from forestry, which declined by -0.4%, driven by falling prices and demand for lumber in the U.S..

In Q2, natural resource prices rose by 10.1%, mostly driven by energy (+13.4%). This contributed to refined petroleum products to balloon by +26.5%, which was a result of low fuel inventories in the U.S. paired with high domestic demand.

Kluane Partners is excited to announce that we are hiring a Corporate Finance Analyst and/or Associate to join our team.

We have experienced significant growth over the past year, and we are committed to continuing this trend. The successful candidate will support with originating, structuring, and executing complex institutionally supported financing transactions for privately-owned companies.

If you are a detail-oriented individual with strong analytical skills and a passion for finance, we encourage you to apply today at 🔗 https://ca.indeed.com/job/corporate-finance-analyst-or-associate-243568894717ef8b.

We look forward to welcoming you to the Kluane team.

According to the most recent yield model estimates using satellite imagery and agroclimatic data, Canadian farmers are expected to far surpass last year's crop production.

The big highlights are significant increases in wheat, canola, barley, oats, soybeans and corn for grain.

According to Statistics Canada, "increased production was largely driven by higher yields because of better growing conditions in Western Canada.".

With recent risks of food insecurity looming over the horizon, this is good news for Canadians and its importer nations.
..

Here's a production (in tonnes) / %chg vLY breakdown by field crop:

- Wheat, all: 34,702,533 / +56%
- Canola (rapeseed): 19,098,993 / +39%
- Corn for grain: 14,861,365 / +6%
- Barley: 9,427,840 / +35%
- Soybeans: 6,505,449 / +4%
- Oats: 4,654,000 / +66%
- Lentils: 2,777,330 / +73%
- Flaxseed: 465,235 / +35%
- Mustard seed: 176,754 / +192%
- Canary seed: 156,944 / +22%
- Chick peas: 156,672 / +106%
- Sunflower seed: 68,147 / -17%

Exports fell by 2.8 percent ($1,977M) in July compared to June, to $68.3B, according to figures released by the Statistics Canada this week.

The decline was observed in six out of eleven product categories. Since the beginning of 2022, the value of exports has risen by almost 20%, and higher prices were behind the bulk of that increase.

However, according to StatCan, "a sharp decrease in prices drove export values down in July, while total exports in real (or volume) terms increased 1.7%, a third consecutive monthly increase."

Total exports -1977
Consumer goods -1169
Energy products -897
Metal and non-metallic mineral products -658
Farm, fishing and intermediate food products +367
Motor vehicles and parts +614
All other sections -235

At some point or another, entrepreneurs will be confronted by a term sheet. This is a critical document when seeking equity financing to grow one's business, therefore business owners must understand what should be included in it. This document lays out the key terms and conditions of an equity financing deal, so it's essential to understand what to look for, and how to get the best terms from private equity companies, venture capitalists, and angel investors.

Here's a quick breakdown of each section.

🔗 If you'd like learn more, visit klupart.com or send us a note at [email protected]

A recent survey conducted by Statistics Canada give us a glimpse into businesses' level of optimism for the coming months.

Several factors (such as inflation, labour shortages and supply chain constraints) have had an impact on businesses in a variety of different ways. And business owners continue to expect to face a number obstacles in Q3 of this year, including increasing costs, recruiting and retaining employees, and those associated with supply chains and inflation.

One-third of businesses expect to raise their prices, and almost everyone expects their staff numbers to stay the same.

But perhaps, the most notable answer: 36% of businesses expect to see a decrease in profitability.

🗣️ As Q3 comes to a close, how are you feeling going into Q4 of this year?

U.S. expansions can be a daunting challenge for any Canadian business due to its various complex markets, increased competition, and scale of operations.

For that reason, Kluane Partners prides itself in helping owners raise the appropriate capital to fund such expansions, which are a key milestone in the growth trajectory of any company.

🔗 If you'd like learn more, visit klupart.com or send us a note at [email protected]

Networking is a critical part of any business, but it's especially important when looking to raise money. That's because your network is your net worth.

When trying to raise capital, Kluane Partners can help by presenting your business in its best light to our trusted network of potential investors, significantly increasing the chances of closing a successful deal.

According to Statistics Canada, while the CPI rose by 7.7 percent in May, average weekly wages grew at a slower pace (+2.5%) than they did in April (up 3.2 percent) and March (up 4.2 percent). Changes in earnings growth can be caused by a variety of factors, including changes to wages and changes to the composition of employment and the average hours worked per week.

Average weekly earnings increased in eight provinces in May compared to last year, led by New Brunswick (up 7.4%) and Newfoundland and Labrador (up 5.9%).

On an annual basis, average weekly earnings rose in nearly every sector last month, led by retail trade (up 9.3 percent to $703 per week), professional, scientific and technical service (up 8.1 percent to $1,659 per week). Whereas, on a year-over-year basis, average weekly earnings fell in May for arts, entertainment and recreation (by -9.7%) and for information and cultural industries (by -6.6%).

Here's a breakdown by province of absolute dollars average weekly earnings changes versus same time last year (May-21 to May-22):

- Canada: 1,131.08 ➡️ 1,159.85
- Newfoundland and Labrador: 1,086.04 ➡️ 1,150.36
- Prince Edward Island: 947.15 ➡️ 958.72
- Nova Scotia: 988.41 ➡️ 1,007.21
- New Brunswick: 998.43 ➡️ 1,072.20
- Quebec: 1,070.75 ➡️ 1,108.87
- Ontario: 1,172.50 ➡️ 1,196.82
- Manitoba: 1,029.59 ➡️ 1,041.21
- Saskatchewan: 1,103.73 ➡️ 1,135.44
- Alberta: 1,226.88 ➡️ 1,250.65
- British Columbia: 1,118.59 ➡️ 1,159.34
- Yukon: 1,278.83 ➡️ 1,328.79
- Northwest Territories: 1,519.06 ➡️ 1,560.50
- Nunavut: 1,490.08 ➡️ 1,527.20

🗣️ Any surprises?

Recent data from Statistics Canada reported that "retail sales increased 2.2% to $62.2 billion in May, recording the fifth consecutive increase. Sales were up in 8 of 11 subsectors, representing 86.8% of retail trade. Sales were led by higher sales at gasoline stations and motor vehicle and parts dealers".

That is not the full picture given inflation, but when adjusted to 2012 constant dollars (aka, volume), we're still seeing a steady uptick in activity across most sub-sectors.

The one that jumps out of the page is clothing sales, which is up 75% vs May 2021. Despite the high gas prices, gasoline sales volume are also up significantly vs May 2021 at +16%.

The only sub-sectors that are underperforming vs last year are motor vehicle sales (despite increase vs last month), and food & beverages sales.

🗣️ Were there any surprises as you studied this graph? How's your anecdotal experience in sub-sector you operate?

Equity financing is a common way for entrepreneurs to raise capital for their business. In exchange for an investment, equity investors receive a portion of ownership in the company. So, when seeking equity financing, business owners will be confronted by a term sheet.

This document lays out the key terms and conditions of the deal in a non-legally binding way before due diligence can commence, and it's essential to understand what to look for. The term sheet should include:

BASICS OF THE DEAL
Such as the amount of money being raised, the pre-money valuation, and the share price.

RIGHTS AND PREFERENCES OF THE INVESTORS
This includes information on things like voting rights, board seats, liquidation preference, and anti-dilution provisions.

USE OF PROCEEDS
This section lays out how the company plans to use the investment funds.

CONDITIONS PRECEDENT
The fourth and final section is typically left for miscellaneous items, such as confidentiality agreements and conditions precedent.

In this blog post, Kluane Partners provides an in-depth breakdown of what to look for in equity term sheets and how to get the best deal.

To learn more, visit 🔗 klupart.com

https://www.linkedin.com/pulse/definitive-guide-equity-financing-term-sheets-what-look-/?published=t&trackingId=LrKeBc0aRv2gTWAQqYt4PQ%3D%3D

The Definitive Guide to Equity Financing Term Sheets: What to Look For and How to Get the Best Terms | Kluane Partners At some point or another, entrepreneurs will be confronted by a term sheet. This is a critical document when seeking equity financing to grow one's business, therefore business owners must understand what should be included in it.

Equity financing is the process of raising money for a business or project by selling shares of ownership in the company or project. In this blog post, Kluane Partners provides an overview of the private and public equity markets, including how they work and who participates in them.

To learn more about how Kluane Partners can help with your equity financing needs, visit 🔗 klupart.com

Full article here: https://www.linkedin.com/pulse/equity-financing-explainer-overview-private-public-markets-/?trackingId=QPKAPrGGk%2FPbPw5gRLN1kw%3D%3D

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www.linkedin.com

Statistics Canada released the latest CPI data today 📈

Consumer inflation rose to 8.1% year-over-year in June, following a 7.7% increase in May. The increase was the biggest annual change since 1983. The increase in June was mainly due increased gas prices, but the price increases were broad-based with seven out of eight major components increasing by 3% or more, Statistics Canada said on Wednesday.

With that, Kluane Partners dug deeper into the CPI trends over the last 10 years and put together a simple heatmap of the main components that go into the index.

🗣️ It is no secret that gasoline and energy have undergone cyclical changes, but do you see any surprises in this graph?

Let us know in the comments!

Cowboy hat, check.
Cowboy boots, check.
New Kluane website, check.

Got all the basics covered for the big week, !

🔗 klupart.com

Calgary Stampede

At Kluane we’re officially swapping our bike helmets for cowboy hats!

Who’s ready to dress in Western wear for the next 11 days? Yahoo!!

Calgary Stampede

Energy production and technologies affect all aspects of our lives and the economy, with benefits ranging from keeping the lights on to transportation of food and goods to health benefits from reduced air pollution. As global energy demands continue to rise, it is becoming increasingly important to develop new sources of energy that are both renewable and efficient.

Energy-related research and development (R&D) investments allow businesses to improve various technologies associated with energy sourcing, extraction, production, storage, transportation, distribution, and its efficient use. Energy R&D can have profound impacts on the economy and can offer organizations the ability to realize global energy policy goals. However, there is no guarantee that every energy-based R&D project will be successful. Therefore, it is important for businesses to carefully consider which technologies they invest in and to monitor the results of their investment over time. By doing so, they can ensure that they are making the most impactful investments possible and reaping the greatest benefits from their energy R&D projects.

In 2020, businesses in Canada showed a strong commitment to investing in energy-related R&D, with in-house expenditures rising to $1.7 billion. This was a noticeable reversal from a decrease in 2019.

⚡Electric power spending played a significant role, increasing by $29 million to $240 million.
🔵 Hydrogen and fuel cells increased $22 million to $87 million
📈 Energy efficiency increased $14 million to $397 million.

But the growth between 2019 and 2020 was driven by R&D expenditures on renewable energy resources technologies, which rose $53 million to $140 million ♻️

Fossil fuels-related in-house R&D still claim a large portion of expenditures (32.1%), but the increase in spending on renewable energy resources is a positive sign for the future of energy production in Canada.

ACG Calgary's Middle Market Growth Conference is always one of the most anticipated events of the year for the Kluane Partners team. We are excited to have been a part of bringing the 2022 edition to life this week.

Thanks to all of our outstanding board partners from Bennett Jones, EY, ATB Financial, TriWest Capital Partners, McMillan LLP, Scotiabank, DHR Global, Gallagher, and the incredible Spark Event Collective team for all their hard work in making this happen.

We hope everyone that attended had a chance to meet new faces and make new connections. We're already looking forward to next year's conference!

Kluane Partners was proud to sponsor Ghost of the Gravel this past weekend 🚴

This race, organized by our dear friend Shawn Bunnin and the Deadgoat Racing Club, brings together cyclist enthusiasts and professional racers looking to have a great time riding on Alberta gravel!

Kluane Partners is overjoyed to support cycling in Alberta and we are glad to be able to contribute to such a great event! Thanks Shawn and team for all your hard work in making Ghost of the Gravel a success!

Congrats to the winners and we look forward to seeing you all there again next year!

Risk is inherent in any investment. No matter how carefully a business examines potential investments, there is always the chance that issues may arise and significant capital may be lost. As such, Kluane proposes that it is imperative to establish the proper risk management strategies to address the potential for credit losses and/or charge-offs.

The Kluane Partners team recently completed a risk analysis project which provided recommendations for a billion-dollar capital provider. By analyzing investment procedures and criteria, the team was able to provide a detailed list of recommendations. Such recommendations will be presented to key stakeholders to ultimately enhance risk mitigation strategies.

Adhering to the Kluane recommendations will allow the capital provider to make more informed investment decisions and have a clear line of sight to the potential risks involved within the portfolio and on every investment being underwritten.

To learn more how Kluane Partners can help your business bring its vision to life, visit 🔗 https://klupart.com/