A multi-generational succession plan at Isolation Élite Inc. will secure the business’s success into the future
By Jessica Kirby • Photos courtesy of Isolation Élite Inc.
When the owners at Isolation Élite Inc. started thinking about retirement, they knew they would need an innovative plan. “We didn’t want to simply close the door on this company that we are so proud of,” says Mathieu Hamel, one of three sellers and general manager. “It was important to us that we know and trust whoever was taking over.”
Isolation Élite Inc was founded in 2003 by Patrick Levesque and Richard Filion. In 2007, Mathieu Hamel joined the ownership team, and the company had 14 employees. Today, it operates throughout Quebec and employs 74 people.
When the owners started thinking about a succession plan, Levesque, co-founder and president prior to the sale, had an idea. Why not choose and build a team of key players from within the business and offer to sell them the company over an eight- to ten-year period?
Choosing the team was equal parts strategy and logic. Maxime Proulx had 13 years’ experience as an estimator and would become the company’s new president. Sylvain Labine took on the vice-president role, driven by 35 years’ experience as a project manager. Jonathan Guérin, associate partner, joined the ownership team with 11 years’ experience as an estimator, and Jonathan St-Maurice, associate partner, had been a project manager for 12 years.
“In our industry and our company, every member is a key part of the team,” Hamel says. “We chose these four for their experience and training.”
In Quebec, the only way to learn estimation in insulation, for instance, is on the job. Proulx and Guérin joined the company out of college and trained under Levesque. “You don’t want to lose those guys,” Hamel says. “We needed ownership that could take on the jobs we were doing and who could oversee the field and production to build a strong team.”
The owners started discussions with those key persons in early 2020 and offered them 25% of the shares to start with. “That made the arrangement accessible to them because it required a minimal investment,” Hamel says.
They didn’t hesitate. The four completed the 25% buy-out with the company’s profits and qualified for a bank loan to purchase the remaining shares. Although it would change the financial terms of the agreement—originally slated to complete over eight years—the sellers decided to step aside and complete the deal early.
They changed the plan in December of 2023. “We presented them with the prospect of selling the entire business quicker than expected, and everyone was motivated to move forward with this new idea,” Hamel says. “When we looked at the numbers, we decided we were comfortable selling at that price to this team of employees we love.”
The transaction was completed October 1, 2024.
The new owners are taking on leadership responsibilities gradually, with a clear plan in place to learn under the previous team’s leadership. Levesque has become a strategic advisor and is looking after contracts and project planning. Filion stayed on with his previous role as project manager and still works in the field mentoring apprentices. Hamel remains general manager and continues to oversee financials, public relations relating to the AIQ, TIAC, the engineering community, and major customers.
“The new owners have been working for in the company for more than 10 years, and they are sharp at what they do,” Hamel says. “We will coach them in their leadership roles over the next year while assuming the same day-to-day responsibilities to facilitate a smooth transition.”
The benefit of this kind of succession plan is that it opens ownership opportunities up to experienced, committed employees who have the drive and willingness to take the project on without a huge, upfront financial burden.
“For us, we don’t have children who wish to take over this type of business, and we want to see our company persevere and grow into the future,” Hamel says. “Having great individuals like these continue our project is wonderful.”
Three of the four new owners were “born and raised” in insulation, building their careers at Isolation Élite Inc. Labine has known Levesque and Filion since they founded the company.
“Sylvain was my customer when I was a salesman for POLR,” Hamel says. “He had another company, and when Pat and Richard were getting started, Sylvain would give them contracts when he was too busy. One day, Sylvain knocked on the door and was hired as superintendent.”
Hamel recommends this type of succession planning to anyone with the right team and the motivation to see the company expand and grow into the future. His only caution is to be open-minded when it comes to generational differences. Since day one, the new team has been part of the decision making, with the senior members holding the veto.
“We are three sellers in our early 50s, and we have been in the workforce doing things the same way things were done 30 years ago,” Hamel says. “Now with new generations, ideas, values, and ways of doing things, there can be a clash. So, it is important to stay aware of that and be open-minded and respectful. “There was a learning curve in the beginning, but ever since, things have gone well for us.”
It is also important to engage the correct experienced professionals who understand provincial regulations, tax advantages and strategies, and legal ramifications of when and two whom to sell the business.
A tax specialist can advise on the advantages and disadvantages of profit sharing versus a one-time payout, can help buyers and sellers choose the most appropriate structure and transaction type, and can help maximize tax any available advantages.
‘It’s best to have support in creating the fairest paper contract,” Hamel says. “It takes a little bit more time, but it is easier, and everyone has peace of mind.” ▪
