July 22, 2000
Patriot goes public with Peruvian Gold
Drew Hasselback
National Post
VANCOUVER - Patriot Computer Corp., which manufacturers the Barbie PC and the Hot Wheels PC for toy giant Mattel Inc., is going public through a merger with a Vancouver-based mining firm.
The proposed transaction, subject to the approval of Peruvian Gold Ltd.'s shareholders, will see Markham, Ont.-based Patriot swap one of its shares for every 3.25 Peruvian shares.
Peruvian last traded at 76¢ on June 29.
According to Patriot, the capital value of the combined companies will be $78-million. The transaction is also subject to regulatory approval and is not expected to close for at least two months.
Patriot uses TV ads, designed in part by Mattel, to sell its Barbie PC and Hot Wheels PC through a toll-free telephone number and an Internet site.
Patriot expects to collect just less than $130-million in revenue for the year ending Sept. 30. About 70% of its revenue comes from the sale of branded machines. The other 30% comes from its Computers 4 Families product line. "When we started we thought we had targeted a little market niche. It wound up being a market monster," said Mark Durst, president and chief executive of Patriot.
Mr. Durst said going public will boost the expansion-minded company's access to capital. Patriot has already assembled plans for a $15-million private placement.
On closing, Peruvian's shareholders will also receive shares in a new company called Tumi Resources Ltd. Peruvian's exploration assets in Peru will be transferred to the new company. "This gives us two kicks at the cat," said David Henstridge, president and chief executive of Peruvian.
According to Whytecliff Capital, a Vancouver investment firm advising Patriot on the transaction, Patriot will be the largest company in terms of revenue listed solely on the Canadian Venture Exchange.
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