Asset-backed financing enables owner to buy out partner
How leveraging owned equipment can provide flexible capital for business investment
When oilfield industry business owner Austin Kosolofski decided to buy out the 50% interest of his business partner, it was a natural choice for him to call us at Arbutus Capital for some advice on how he could make that happen. After the deal was complete Austin told Mike at Arbutus, “When it came time to buy out my partner, you helped me through it. Over the years your knowledge, how to structure deals and take advantage of tax benefits through leasing has been amazing.”
The back story:
Arbutus Capital has been providing lease financing on heavy trucks and tank trailers for Austin’s family business, in the oilfield industry for many years. The relationship started with our fathers doing business. As each company passed on to the sons, the relationship continued between 2nd generation owners: Austin of Endeavor Oilfield Logistics, and brothers Mike and Joey of Arbutus Capital.”
Raising capital to buy out a partner:
Austin and Mike agreed the best approach to raise funds needed to pay out the other partner was for Arbutus to provide sale-leaseback financing on some of the free and clear business assets. Austin also pooled his savings to cover the remainder of the sale price.
First, the assets were appraised by a third-party appraiser. Then, lease documents were signed and the funds sent to a lawyer’s trust account with the condition that the other partner of the business assign his shares over to Austin.
About his experience working with Arbutus, Austin had this to say: “Arbutus was ready every step of the way. They will go as fast to get the deal done as you are willing. You are not waiting weeks, usually just days.”
Mutual trust, respect from a long-term relationship, and perseverance to make the deal happen paid off and all parties were pleased with the results.
“The Arbutus Capital team is not just personable they are personal, getting to know you and your business and helping to make it successful.”
Austin Kosolofski, Endeavor Oilfield Logistics Inc.
Creative thinking and an appreciation for hardworking entrepreneurs and independent owner-operators make us a natural fit to provide lease financing and support your business. Give us a call and let’s talk business.