CSRS is a leader in providing personal property security registration and search services in Canada.

www.csrs.ca

Investment

C$29 million

Fund

ONCAP I

Period

April 2004 – March 2006

ONCAP Team

Michael Lay

CSRS image

Transaction Summary

ONCAP partnered with one of the existing shareholders and co-founders to acquire a majority interest in CSRS in April 2004.

Business Description

At the time of ONCAP's investment, CSRS was the largest provider of Personal Property Security Act (“PPSA”) registration and search services across Canada. CSRS, in collaboration with the registry departments of each province and territory, developed a proprietary data processing infrastructure with a direct interface to each jurisdiction’s registry system. CSRS specialized in registering PPSA charges on assets, conducting PPSA searches and registering securities under the Bank Act (Canada). CSRS’ customer base included all Canadian Schedule A banks and auto acceptance and leasing companies in Canada.

Accomplishment and Outcome

CSRS had a number of attractive investment attributes, including: (i) strong market share in Canada; (ii) loyal customer relationships comprised primarily of blue chip clients such as Canadian Schedule A banks and auto acceptance companies; (iii) sustainable competitive advantage created by a proprietary registration system; (iv) unique business model in which CSRS’ customers require the registration but the cost is passed through to the end consumer; (v) attractive cash-flow characteristics (high EBITDA margins with low maintenance capital expenditures and working capital requirements); and (vi) opportunity for further growth through expansion of service offerings and new customer wins.

In March 2006, ONCAP exited the investment through a sale to Resolve Business Outsourcing Income Fund concurrent with an initial public offering, realizing $99 million in net proceeds, which represented a 3.4x gross multiple of capital invested and an 84.1% gross IRR over the two-year investment period.