By: Leah Kellar
Stealth Energy Services (Stealth) is a world leader that has started from the ground up in the supply of products and services to the oil and gas, heavy oil, oil sands, mining and telecommunications industries. Working out of his basement, company founder and president, Colin Davison, started Stealth in 2006 with just one employee. The company has since expanded from humble beginnings to reach some of the highest echelons of decision-making influence within the industry. In only four short years since creating Stealth, Davison was offered a seat as a participant at the roundtable discussion of Canada’s Economic Action Plan (a strategy of positive measures to grow the economy and to help create jobs following the global recession of 2009), where he found himself speaking candidly with Prime Minister Stephen Harper. In 2010, Davison was honored by Prince Charles, Prince of Wales, in acceptance of the Global Innovator of the Year Award in Mexico City. Stealth was chosen out of 1500 companies, which were judged by delegates from over 30 countries, to receive the Global Innovator of the Year award in Mexico City.
“Just to have the opportunity to go to Mexico City and have the award presented by Prince Charles was very exciting and certainly one of the premier moments of our corporate life,” said Davison.
In 2002, after several years of working as an employee for one of North America’s largest engineering companies supplying exhaust silencers, Davison recognized a need in a market that was facing emerging legislation and regulations to inhibit noise. With the goal of meeting this need he came up with a solution that would couple the engineering of noise and pollution silencers with clever manufacturing and installation. He refined his idea for the company to be compliant with impending legislation, while meeting the market demand. It was an intrepid move.
“I guess being somewhat young and naïve I mortgaged myself to the eyeballs and decided to strike out on my own. It really came down to being more responsive to what the market was looking for. I felt like the market wasn’t getting what it wanted,” says the entrepreneur – who was only in his early 30’s when he started Stealth – during a recent interview with Business Elite Canada.
At that time the company functioned chiefly as a provider of acoustic services and emissions control systems. Now 50 percent of the business is made up of electrical systems: substations, E-Houses, remote instrument buildings, electrical buildings, MCC buildings, switchgear buildings, pump stations, power distribution packages, and power generations packages, while 40 percent comprises mechanical systems such as pump packages, mechanical process and piping packages, and only 10 percent of the business remains acoustical and emission control.
Admittedly, it was a big gamble for Davison at the start, but it was a risk aided by years of experience that would soon pay off.
“I had been in some businesses that were similar and just thought I could build a better mouse trap,” he said.
And if the company’s growth is any indication, then he has certainly been a success at improving the mousetrap. Currently in its ninth year, the Calgary based company has grown at a minimum rate of 40 percent annually, totaling 350 per cent for the past five years. Stealth sits at number 11 of Alberta’s Top 50 of the fastest growing companies as seen in the recent publishing of Alberta Venture magazine.
It was six months after its start that the company was able to move out of the basement and into a small shop location. Today, Stealth has about 50,000 square feet of shop space and about 20 acres of land for packaging products. It has gone from one employee to start, to six by the end of 2006, to 25 in 2007, and now it has 140. Within months the enterprise grew from a small business to a medium size one averaging 60 employees before a few major contracts catapulted the company to new heights of growth. In 2008 and 2009 Stealth landed contracts with Suncor and Siemens Canada. The Suncor Firebag and North American Oil Sands Project was worth approximately $6-million. Other very lucrative contracts were won with Tundra Process Solutions, Finning, Cummings, Waterous, Shell, Husky, Imperial, Quicksilver Resources, Devon Energy, Apache, Enerflex, and Savana Drilling & Saxon Energy, just to name a few. Among those Davison notes Encana as being a strong contributor to Stealth’s initial growth.
“Over the years they’ve been instrumental in not only growing our business in the early years, but they continue to be a strong customer for Stealth since its entire inception and have done significantly positive things for our business,” he said.
“Enbridge and TransCanada Pipelines have both very much supported our business and our growth and have been very much responsible for that 40 percent additional growth every year in the last two to three years, and we’re looking for that to continue into the New Year,” Davison added.
A few other companies that Davison credits with adding a substantial contribution to the growth of the business are Specialized Electric, Russel Metals, and Tundra Process Solutions. He also stresses the importance of having a good legal and financial support team. Bennett Jones LLP represents Stealth in the managing of its legal affairs, and Lockhart LLP has handled all of the accounting for the company since its inception.
“They’ve been instrumental in guiding us through the major growth, that’s when you really need strong legal support.”
Stealth has enjoyed a strong relationship with its lenders as well.
“We’ve been working with the TD Bank and some of that growth is very difficult to handle and muster from a financial position but they’ve been extremely supportive of our business over the last few years,” says Davison.
Long-standing support, along with milestone projects over the past nine years has enabled the company to branch into new territory in Australia and survey prospects for expansion into the U.S market.
“We’re always looking for opportunities to expand. The Australian market came calling with a heavy demand for acoustical products. Acoustical requirements combined with some of our electrical and mechanical packages, so that worked out very well for us,” Davison said.
Stealth has sent more than 40 packages over the course of the last few years to meet demand there. In terms of challenges, Davison acknowledges that innovation and figuring out what can be done to serve the market and give the company the competitive edge is a constant preoccupation.
“I think it’s very important to look at how certain products can be built better, faster, more efficiently. I think too many people get caught up in trying to create something new as opposed to taking something that already exists and figuring out how to remove roadblocks and to increase quality and efficiency in existing products. You have to consider what the things are that make customers feel constrained, what they would like that is better than what they currently get, then work backwards from there,” Davison told BEC.
It is this commitment to innovation and finding solutions in the area of improving what already exists in the market for customers that has made Stealth stand out among the competition.
Another one of those premier moments came in 2009 when Stealth was invited to be a participant in a roundtable discussion with Prime Minister Harper focusing on Canada’s Economic Action Plan initiative.
“It was a great honour to be asked by the Prime Minister to meet with him with a number of small to mid-size entrepreneurs across Canada and to really have a roundtable discussion in a closed door atmosphere for two or three hours, which was a significant amount of time. I went into the meeting expecting it to be polished , but it wasn’t anything like that,” Davison recalls of the once-in-a-lifetime experience. “We each had opportunities with the Prime Minister to have real conversations with him directly in regards to ideas on how businesses can help the economy grow.”
Moving in the spirit of continued growth and contribution to Canada’s economy in 2014, Stealth is focusing on a short-term goal of building its engineering team and capacity. In the long term, its focus is on continuing to strengthen relationships with core customers.
“We’re not a company that’s out there looking for 1000 customers. Our model is really to work in the neighborhood of 10 to 20 customers and to really expand on their business and their business needs, and really help them streamline what their needs are in terms of electrical and process equipment and try to maximize their experience, as well as our growth.”
The benefits and opportunities for employees are always within Davison’s sight looking ahead— after all, it was several years of working as an employee building similar company systems that inspired him to launch Stealth.
“We have a very positive outlook for our company. We expect to employ over 200 people in the 2014-15 fiscal year. We’re expecting another 40-50 per cent growth this year, and we expect to exceed the 200-employee mark. That’s a major plus for our employees at Stealth and the economy as well moving forward.”