Langley, BC-based flooring retailer and installer, Nufloors, has transformed from a single franchised location to a 22 member, national cooperative group during its 45 years in business, and recently partnered with First West Capital to finance a management buyout.
As part of its succession plan management of the cooperative, and flagship Langley location, had been transferred to long-time employee, Nick Kaplanis, several years ago. When the previous owner decided to sell the business, Nick was the natural buyer; however, he quickly discovered that buying the business was not as straightforward as he’d expected.
Nufloors engaged a business consultant who introduced Nick to First West Capital’s Greg Smith, Senior Associate. “Greg was very supportive of the business and I immediately felt like I didn’t need to look elsewhere for financing,” Nick says. “The partnership just clicked.”
“Greg was very supportive of the business and I immediately felt like I didn’t need to look elsewhere for financing. The partnership just clicked.”
“I knew upfront that I would need financing to complete the management buyout,” says Nick. “Beyond that, I thought it would be a fairly quick transaction, but it turned out that getting financing from First West Capital was the easy part.”
Although Greg was able to quickly secure the debt financing enabling Nick to purchase Nufloors, Nick started to encounter other complications with the transaction. That’s when Greg stepped in to help Nick navigate the process.
“Greg was very patient and continued to show confidence in the deal and the business when things were delayed. He was instrumental in helping us smooth out some of the issues that held up closing,” Nick shares. “Our relationship with Greg went beyond simply financing, I appreciated his guidance and expertise.”
“There can be surprises even with the most straightforward management buyout. Most times, neither the purchaser nor the seller have completed a transaction like this before,” says Greg. “Nufloors had the advantage of being a successful, growing business, not to mention the benefit of Nick’s 20 years’ experience as an employee and manager. Nufloors is set up to continue to thrive with Nick at the helm and we were happy to help Nufloors facilitate the management buyout.”
“Managers are often the best purchasers of the business because they are dedicated employees, have intimate knowledge of the business and are motivated to see it succeed – Nick is a perfect example of this.”
As for the future of Nufloors, Nick says that it will continue to grow steadily. “The way we do business is staying the same – we have a strong cooperative, exceptional employees, quality products and a focus on customer service, from sales to installation. We feel strongly about continuing to be true to our brand.”
Nufloors also plans to take advantage of the growing home renovation market in Canada, as well as the hot real estate market in BC’s Fraser Valley. And thanks to its member-based cooperative purchasing power, Nufloors can offer its customers the latest trends in flooring at competitive pricing.
“It’s exciting, and rewarding, to finally have the business formally transitioned under my ownership,” explains Nick. “It was very worthwhile having the support of First West Capital during the transaction, and I would certainly recommend Greg and the team to other businesses looking to do a management buyout.”