Phil Kurtz: Entrepreneur, Dealmaker,
Recession-Buster
Philip Kurtz is doing his part for the Oklahoma economy. He’s directly responsible for more than 300 high-paying jobs in the greater Tulsa area, and counting.
A graduate of Edison High School and the University of Tulsa, Kurtz founded and built hospital billing service provider CIS Technologies in the late 1980s and early 1990s. He sold it to National Data Corporation (NDC) in 1996. CIS employed 450 at the time – 200 in Tulsa alone. CIS now flies the McKesson flag. Kurtz retired in 1999, but the firm continues to employ some 300 highly compensated knowledge workers in Tulsa (and many more outside Oklahoma).
Phil reflects on two years of retirement that followed his exit from CIS/NDC/McKesson: ”Worst job I ever had.”
So he set out to build another company; one that would help large employers deal with a challenge Kurtz faced as head of CIS: lack of control over health care benefit expenditures. Benefit Informatics, as it came to be called, would gather and analyze employee health care cost data for employer-customers and provide strategies for cost reduction. Significant research and development ensued, followed by product development. In 2005 the product was ready for launch. Customers signed on and the business took flight.
Successful new businesses burn cash like a Hallett Raceway dragster burns nitromethane, and profits are not supply enough — as every successful entrepreneur knows. Kurtz funded Benefit Informatics out of his own pocket and then accepted funds from friends and family, individual investors and, finally, VCs. But by year-end 2009, market demand, revenue growth and expansion opportunity growled for more. The employee count — all in modern offices at Jenks Riverwalk — had grown to 22, but it was time to secure funding for the next wave of growth. This $10 million company was on its way to $100 million — it just needed capital.
Kurtz and his M&A representative hit the phone and the road, and by spring 2010 had several funding options. Kurtz’s pedigree made the effort much easier than the time before. He chose the offer from BenefitFocus, a Charleston, South Carolina-based company that provides benefit software to large employers and insurance carriers. “Courting and raising capital takes time, and it can be expensive, but we are committed to growth and, of course, growth requires capital,” Kurtz says.
The BenefitFocus deal offered more than Kurtz set out to obtain. In addition to growth capital, it provided:
- immediate payday for shareholders (including six managers who had earned stock as part of their compensation package)
- ownership in the investing company
- handsome incentives for continuing to grow the company
- commitment to keeping employees in Tulsa
- considerable synergies between the two companies
It was the proverbial offer that’s too good to pass up. The deal was consummated last week. “We expect our employment to double in the next year, and then double again, and again, over the next few years,” says Kurtz.
Kurtz has proven his ability not only to establish viable businesses but attract necessary capital. In his CIS venture, he secured the backing of some big-time players: GE Capital, Banker’s Trust and Swiss Re.
Some guys think, work and plan. Other guys get it done. Kurtz is a man who gets it done: a one-man economic development program for Oklahoma.
If you thought that with an Oklahoma education and an Oklahoma location you could not compete in the open market, think again.
Written by David L. Perkins, Jr., Managing Director of Tulsa-based Acquisition Advisors and Managing Editor of The Business Owner Journal.
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