Kingsway Financial Services Inc. announced the acquisition of the privately-held company Ravix Financial Inc., the first such acquisition completed under Kingsway’s unique CEO Accelerator Program. Ravix, based in San Jose, California provides outsourced financial services and HR consulting for short or long duration engagements.
“We are excited to join the team at Kingsway”
“I am excited to welcome the Ravix team to the Kingsway family of companies,” said Kingsway President and CEO, J.T. Fitzgerald. “Dan Saccani and team have built a leading company that has a solid reputation and loyal customer base. This is Kingsway’s first acquisition under its CEO Accelerator Program and I look forward to Timi Okah, our first CEO-in-Residence, transitioning into the role of Ravix CEO over the next twelve months.”
“While Ravix won’t be part of our successful Extended Warranty group of companies, we believe it exhibits many of the same characteristics that makes it an attractive long-term part of our portfolio,” J.T. continued, “which includes low working capital demands, recurring revenue, an impeccable reputation in its industry and a loyal customer base.”
“We are excited to join the team at Kingsway,” said Dan Saccani, Founder and Executive Director of Ravix. “This acquisition presents an excellent opportunity for Ravix to partner with an organization that shares our ideals of sustainable growth and reinvestment in people as we look to expand our presence both within Silicon Valley and beyond.”
“Over the past twenty years, Ravix has developed a reputation as one of the premiere providers of outsourced financial and human resource services for venture-backed companies in the Silicon Valley,” said Timi Okah, President & CEO of Ravix. “I look forward to working with Dan, and the talented team of finance and HR professionals at Ravix, to continue to deliver the highest level of service to our clients.”
For the twelve month period ending June 30, 2021, Ravix had $12.5 million of unaudited revenue, $1.9 million U.S. GAAP income before income taxes and $2.8 million of unaudited non-GAAP adjusted EBITDA. A reconciliation of U.S. GAAP income before income taxes to non-GAAP adjusted EBITDA is presented on the attached schedule. Even after taking into consideration the anticipated effects of purchase accounting, Kingsway expects the acquisition to be immediately accretive.
The purchase price was $11 million (subject to customary adjustments) at close, with an additional $4.5 million that could be paid over the next three years depending upon achievement of certain financial metrics. The closing purchase price was financed with a combination of debt financing provided by Avidbank, and cash on hand. Ravix Acquisition LLC, a wholly-owned subsidiary of Kingsway, together with Ravix, borrowed a total of $6 million, in the form of a term loan, and established a $1 million revolver (together, the “Loan”) that was undrawn at close. The Loan has a variable interest rate, with the initial annual interest rate equal to 3.75%. The Loan requires monthly principal and interest payments and the term loan matures on October 1, 2027.