First West Capital facilitates a smooth shareholder buyout for Zucora

Our partnership with Zucora proves that a shareholder buyout doesn't have to be difficult - it just needs to be smart and responsive.

This time last year, Zucora’s President and CEO, Brad Geddes, began planning for the buyout of a minority shareholder. In addition to buying back shares of the London, Ontario-based furniture protection plan company, Brad also wanted to reduce the company’s operating costs and strengthen its working capital. And the timing couldn’t be better. Zucora had just secured a major retail partner, Hudson’s Bay Company, and it was busy putting resources in place to serve this new program.

With these growth initiatives moving forward quickly, Brad was exploring ways he could optimise capital to successfully expand the business. This led him to the Toronto Business Transitions Forum, where he fortuitously met First West Capital’s David Hastie, Regional Director, Ontario. The conversation quickly turned to how David could help Zucora finance its shareholder buyout.

“I connected with several lenders but David was the most responsive and took the time to understand our business,” explains Brad. “David immediately built a strong relationship and partnership with us due to his genuine interest and deep understanding of our business. From there, he was able to put a deal in place that worked.”

A deal that included keeping working capital in the business to ensure continued service to retail partners and suited the exiting shareholder. “We had to act quickly, and the transaction went surprisingly smooth thanks to David and his colleague Cuong Pham,”Brad notes.

The process of securing financing turned out to be valuable in more ways than one. Brad hadn’t put pen to paper when it came to succession planning, but through the process with David and Cuong he solidified and documented a plan. “My children were happy about that!” he jokes. In addition, the thoroughness of the due diligence helped Zucora articulate and clarify their growth opportunities.

Zucora is the dominate supplier of furniture protection plans for the majority of major national and regional furniture stores in Canada. As the $12 billion home furnishings industry continues to grow as more Millennial Canadians forming new households, Zucora plans to capture this segment through technological innovation, expanding its distribution channels, retail partnerships and products offerings – namely the introduction of its non-toxic based cleaning products, ZU Collection.

As a leader in its industry, Zucora prides itself on a very high level of customer service, and Brad attributes this to its continued success. “The strength of our business depends on our commitment to our partners and their customers,” says Brad.

David and the team at First West Capital saw this as a huge differentiator. “Zucora has been able to realise significant growth because of its ability to deliver above and beyond customer service. Its well positioned in the market with a formidable list of major retailers in Canada,” shares David. “Brad and his team were a pleasure to work with as they were very transparent and responsive throughout the entire process. Their passion and partnership-focus was evident from our first meeting and continues to this day. We’re happy to provide financing that allows them the flexibility to take the business to the next level.”

Brad adds, “Our values aligned with First West Capital; we received a high standard of service that we aspire to deliver to our own customers.”

Brad offers a piece of advice for fellow business owners looking for financing, “Be completely open and transparent about your business’ strengths and challenges, a lot can come from honest dialogue. No business is perfect, but working with professionals like First West Capital helps you get better.”

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