Pharos Capital Backs RFID Biz Rush Tracking

By Daniel Hausmann
Dow Jones LBO Wire, Technology
Nov. 17, 2009


Toby Rush didn't think his company would be a fit for private equity even after an early summer cold call from Pharos Capital Group.

But after some persistent follow-up calls and explanation of Pharos's growth equity model, Rush found himself selling his business, electronic tagging company Rush Tracking Systems, to the firm.

"We're still pretty early on," Rush said in explaining his initial hesitation. "After I understood their private equity model better I agreed we were a good fit for them."

The sale price was not disclosed; Pharos bought out Rush, Co-Founder George Rothwell, and a mix of angel investors, United Technologies Corp.'s Carrier Corp. and friends and family. Rush sold so that Pharos' capital could be used to fund growth and investment in the business. Rush, the company president, and the rest of his management team are staying on. The company plans to invest aggressively in its sales and marketing.

Rush Tracking's financial performance was not disclosed. The company provides technology that helps warehouse managers automate how their forklifts move products. Clients include Boeing Corp., Spirit AeroSystems Holdings Inc. and Monsanto Co. Pharos is hoping to capitalize on growth in the radio frequency identification industry overall.

"While the industry has had fits and starts in the past, Rush has been able to deliver results to companies with their solutions and corporate America is starting to see the potential for real returns from incorporating RFID into their organizations," Pharos Partner Jim Phillips wrote in an e-mail.

Pharos has also made venture capital-style investments in fellow RFID company Time Domain Corp.

Headquartered in Kansas City, Kan., Rush Tracking has about 20 to 30 employees.

The firm closed its $400 million Pharos Capital Group Fund II in 2006.