Investment from Connect Manitoba Growth Fund fuels ‘next big step’ for Northway Aviation
Source: Winnipeg Free Press
After almost two decades in the venture capital wilderness, the first investment of private equity/venture capital from the provincially funded Manitoba First Fund has taken flight.
Connect Manitoba Growth Fund — managed by Saskatoon-based WestCap Management Ltd. — has made an investment of an undisclosed amount in Northway Aviation, a regional airline that flies mostly to small Indigenous communities in northeastern Manitoba and northwestern Ontario.
Northway has been family-owned for more than 50 years and has been steadily increasing its fleet (to nine planes).
Northway services 15 communities, including the Pauingassi, Little Grand Rapids, Poplar River, Garden Hill, Red Sucker Lake and Deer Lake First Nations.
The company flies Pilatus, Caravan and Grand Caravan planes, mostly nine-seaters some with amphibious landing options, depending on the season.
Grant Kook, CEO of WestCap, said the deal meets all of the criteria Connect Manitoba Growth Fund is looking for.
“This is a classic, where the owners (the Johnson family) have been there for a long time, who wanted to reduce their positions a little bit, but at the same time remain in management and grow the company,” Kook said Thursday. “For us, we couldn’t think of a better scenario.”
In addition to the Manitoba Growth investment, WestCap’s private equity fund (WestCap MBOIII) is also in on the deal, giving WestCap majority ownership in the company.
It aligns with Manitoba First Fund’s mandate to invest in companies that need growth capital, while keeping ownership local and bringing in additional investment from outside the province.
The deal is also an endorsement in future economic development growth in the North, Kook said.
“The need for critical northern air service is not going away. It’s only going to grow. There is more and more economic activity going on up there, and if we didn’t think the economics and politics of the North wasn’t stable, we wouldn’t be there.”
Chris Mellen, CEO of Northway, said the investment is going to allow the company to continue growing and serving the region.
(Mellen’s spouse is the granddaughter of the founder of the company — the Johnson family from Arnes — who have been running the company since 1962.)
“This investment represents the next big step in the Northway story. We look forward to continuing this growth trajectory alongside our new partners to provide even more Manitobans and Ontarians with competitive critical airline services,” Mellen said.
martin.cash@freepress.mb.ca