Promising Partnership Secures Acquisition Funding
Since 1994, TeksMed has been providing a variety of return to work management services to companies with employees impacted by injury or illness. TeksMed proactively manages the claim process on behalf of employers with their clients benefiting through reduced premium costs and the expedited return to work of injured employees. The company is well-established in the marketplace and offers their services across Canada.
When the opportunity came along in late 2015 to purchase TeksMed from the current shareholders, partners Jeff Hunt and Tony Culhane looked to First West Capital to come up with a financing solution. Although TeksMed had a history of strong sales, the service nature of the company’s operations did not lend itself well to traditional asset-backed financing. It was up to First West Capital to step in and leverage the real potential within the company.
Culhane had been heading up the operations side of TeksMed since joining the company as president in 2007 while Hunt had previously been the controller and was currently the company’s assurance partner from a regional professional accounting firm. Culhane’s operations experience and keen understanding of the industry combined with Hunt’s accounting and finance background made a great combination. The business acumen to begin building on the company’s already steady returns was firmly in place, but the two partners did not have the resources available to manage the buyout.
Taking a Long-term View
“TeksMed is a growing company with well-established cash flows and the partnership of Jeff and Tony provided continued operational strength and sound financial management,” says First West Capital senior associate Amrit Minhas. “We could see the strength of the company and flexibility from all parties involved allowed us to put together an innovative combination of sub-debt and vendor financing.”
Culhane adds, “I normally leave the financial decisions of our business to Jeff, but the overriding sense of commitment and willingness to help demonstrated by Amrit and First West Capital vice-president Robert Napoli in our initial meeting clearly distanced them from the others. I definitely wanted to work with these guys.”
In the end, First West Capital was able to pull together the right combination of financing tools to make the deal work and Culhane and Hunt are now fully in charge of TeksMed and pursuing a number of opportunities to further drive the company’s success.