Sale of Rush Tracking will help company with its growth

By SUZANNE KING
Special to The Kansas City Star
Nov. 16, 2009


Lenexa-based Rush Tracking Systems has been acquired by Pharos Capital Group, a private equity firm based in Nashville and Dallas, the companies said Monday.

Financial terms of the deal were not disclosed, but the companies said the agreement included a capital investment that would allow Rush, which specializes in outfitting warehouses with radio frequency identification technology, to grow at an accelerated pace.

Rush president and founder Toby Rush — who was one of the first class of fellows in the Kansas-funded Pipeline entrepreneurial program — said the 100 percent buyout meant company founders and investors “made out very well.”

“It’s great timing for exiting investors to make a great return,” he said.

Rush said he and his management team would remain in place under the new owners, and he said the company did not intend to shed any jobs. The company employs between 20 and 30 full-time and contract employees. About two-thirds of them are based in Lenexa.

“It’s just a pit stop,” Rush said of the acquisition. “We’re just shifting into another gear.”

Jim Phillips, a partner in Pharos Capital who will take a seat on Rush’s reconstituted board of directors, said the acquisition represented a vote of confidence in Rush’s business strategy and its strong client base, which includes Monsanto Co., Boeing and other Fortune 500 companies.

Phillips said Pharos looked at other investments involving radio frequency before settling on Rush.

Rush Tracking Systems was founded in 2003 as a consulting firm to help companies purchase and install radio frequency systems. Within months of the company’s inception, Wal-Mart announced that it would begin using the technology to track its inventory. That prompted growing interest in radio frequency among companies of all sizes and orientations.

Rush Tracking Systems played into the growing interest by consulting with companies across a broad array of industries. Eventually Rush turned to a specific niche — warehousing and logistics — and today sells a tracking system that allows a forklift to pinpoint a specific pallet in a warehouse.

Paul Morris, an exiting board member and investor in Rush, said the Lenexa company was unique in the industry for developing a viable business model for the technology.

The acquisition by Pharos puts Rush in a good position for continued growth, Morris said.

The acquisition represents the first major success story to come out of the Pipeline entrepreneurial fellowship program.

Rush credited the program with helping him push his company to the next level.

“It gave me a lot of perspective on thinking bigger — helping us think a lot about how big we can get and how fast we can grow,” Rush said.

Past and present Pipeline fellows, who are meeting this week in Kansas City, include entrepreneurs from throughout Kansas. The Pipeline organization, which has been funded through the Kansas Technology Enterprise Corp., is currently interviewing applicants for its 2010 class.

Pipeline president Joni Cobb said Rush’s success came sooner than anyone had hoped for a program fellow.

“Toby was certainly aiming for an exit of this kind so he could grow this opportunity as much as possible and then move on to another endeavor,” Cobb said. “He’s a serial entrepreneur in the making.”

His company’s acquisition is a wonderful story for Pipeline and for all the individuals who invested in Rush Tracking systems, Cobb added.