Innovation

A Worthy Investment

The five years Harvey Schilke spent preparing to sell his business yielded a well-funded retirement

Written by Frank Condron

Harvey Schilke

Partner and CEO

Protek Corp., London, Ont.

For Harvey Schilke, the path to a well-funded retirement—and successful sale of his printing and IT firm—was five years in the making, but worth the effort.

Back in 2007, on Schilke’s 60th birthday, he broached the subject of his eventual exit from Protek Corp., the firm he purchased in 1997 with his much younger partners, Al MacKinnon and Peter McMahon. Because the others had no interest in assuming the debt required to buy Schilke out, they agreed that selling to a third party was the best option.

The trio devised a five-year plan to increase the company’s revenue growth and profitability. The central element of this strategy was to improve Protek’s annuitized revenue stream by moving from project-based work to ongoing IT-management services with fixed contracts. “It just gives the buyer a little more comfort, plus it helps with your revenue multiple when it comes to valuation,” says Schilke.

Protek’s business grew steadily and, by January of this past year, the company was being courted by three buyers.

Ottawa-based TUC Brands and a U.S. company eventually made offers. Schilke and his partners went with the Canadian outfi t because they felt its strength in managed-IT services could propel Protek’s business to the next level. The deal closed in August, and now the company operates as a regional division of TUC Brands. Both MacKinnon and McMahon have stayed on as vice-presidents.

As for Schilke, he is retiring at the end of 2012, with plans to spend more time on his boat and vacationing in Florida. But, typical of a serial entrepreneur, he will keep his hand in the game by working on a project-by-project basis as a TUC consultant.

Originally appeared on PROFITguide.com