Kingsway Financial Services Inc. (“Kingsway”) today announced the acquisition of the privately-held company CSuite Financial Partners (“CSuite”), the second such acquisition completed under the Kingsway Search Xcelerator Program. CSuite, based in Manhattan Beach, California (www.csuitefinancialpartners.com), is a national, financial executive services firm providing financial management leadership to companies in every industry, regardless of size, throughout the United States.
“This is Kingsway’s second acquisition under the Kingsway Search Xcelerator Program and will be run alongside Ravix, which we acquired in October 2021. It fits our model of low capital demands, re-occurring revenue, and strong margins in a growing industry” said Kingsway President and CEO, J.T. Fitzgerald. “Arthur Cohen and team have built a leading company that has a solid reputation and loyal customer base. I am excited to welcome the CSuite team to the Kingsway family of companies.”
“This acquisition presents an excellent opportunity for CSuite to partner with an organization that shares our ideals of sustainable growth and reinvestment in people,” said Arthur Cohen, Founder and National Managing Partner of CSuite. “We are excited to join the team at Kingsway and Ravix.”
“We believe that the addition of CSuite is a nice complement to the offerings provided by Ravix – both CSuite and Ravix will be able to go to market as a one-stop shop of services for our clients,” said Timi Okah, President & CEO of Ravix. “I look forward to working with Arthur and the talented team of professionals at CSuite to continue to deliver the highest level of service to our clients.”
For the twelve-month period ending July 31, 2022, CSuite had $9.4 million of unaudited revenue, $0.9 million U.S. GAAP income before income taxes and $1.8 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 $8.5 million (subject to customary adjustments) at close, inclusive of $0.9 million paid for cash on hand at close, with up to an additional $3.55 million that could be paid over the next three years depending upon achievement of certain financial metrics. The closing purchase price was paid in cash; however, the Company expects to complete a recapitalization of the loan currently in place at Ravix in the near future.
For more information regarding the CSuite transaction, please join Kingsway’s third quarter results call on November 10, 2022 (https://kingsway-financial.com/press-releases/).
Eversheds Sutherland (US) LLP served as legal counsel to Kingsway and Jeffer Mangles Butler & Mitchell LLP served as legal counsel to the sellers, and JD Merit & Company served as financial advisors to the sellers in connection with the transaction.
