more emails on SBID situation: not a flipper, imo.
SPECIAL SITUATION ALERT:
The Small Cap Digest/Investment Opportunity Report is pleased to alert members to SBI Communications, Inc. (OTCBB: SBID) SBID is a very dynamic special situation that we’ve been following since late last year, when Valencia Entertainment took control of the Company through a reverse merger. This company is making tremendous headway, and early investors in the company should enjoy holding this little gem for years to come.
NOTE: We anticipate a name change (and probable symbol change) reflective of the recent positive fundamental developments produced by this interesting media/entertainment play.
As we will continue to reiterate time and again, the key to success in small cap investing is finding companies with strong management that have great growth potential that can also be bought at a reasonable value. Such value can help weather even the roughest of market “storms.”
Mr. Vince Vellardita, President and CEO of Valencia Entertainment, is the leader of the newly formed public entity identified for now by the SBID symbol. Mr. Vellardita is a deeply dedicated, experienced, and successful entrepreneur, with over twenty years of industry experience. Mr. Vellardita began his career as a music producer, but before long he garnered a reputation for developing cost effective media production facilities, including satellite networks, for large media companies nationwide.
He started Valencia Entertainment five years ago with a modest bit of his own cash, and a clear vision. His burning desire was to design, build and operate a facility capable of bringing together all the components necessary to complete a television or film production, all at a single location.
Over the past five years, Mr. Vellardita has established Valencia Entertainment’s first location as just such a premier production facility. The Company is located in none other than Valencia, CA and operates its Studio Division on 15 acres of land with eight stages that provide about 175,000 square feet of space for set design, construction and filming. It also includes an additional 80,000 square feet of production office space.
The stage buildings and production offices are fully air conditioned, and the facility boasts complete audio and video control rooms, and in-house lighting and grip packages. The Company provides their clients with 24/7 Security service and offers reserved parking for up to 475 vehicles. The popular CBS hit series “JAG,'' and the Fox Family kid’s series, “Power Rangers'' are just two of the shows whose productions are hosted there.
Their ongoing success has made Valencia an attractive site for an increasing base of business. SBID clients include such venerable household names as Warner Brothers, Paramount, Universal, MGM, Sony, and 20th Century Fox. Network television producers ABC, CBS, and NBC, and cable stalwarts HBO, Showtime, and MTV are additional headliners on the Company’s growing client list.
On December 22, SBID announced the signing of a letter of intent for a firm-commitment underwriting for $10M. Given current market conditions, this announcement really caught our attention. Six days later, the Company made its first standout move, announcing the strategic acquisition of Half-Day Video, Inc. of Burbank, CA.
Half-Day Video has provided production equipment rentals to the television and motion picture industries for ten years, and the acquisition provides SBID with a successful turnkey operation. In addition to the production equipment inventory, SBID also acquired the office building and warehouse facility, both previously owned by Half-Day.
The need to provide rental equipment service to a growing number of “middle-tier” clients made Half-Day a perfect acquisition, and the transition has been relatively seamless, as Half-Day’s employee roster has remained virtually intact.
Half-Day Video’s existing client list includes The Academy Awards, The Emmy Awards, Entertainment Tonight, MTV, The Oscar Awards, General Hospital, and other major entertainment and production companies. The Studio Division now has the added capability of providing in whole or in part, any of the necessary production hardware a client might need, further enhancing their overall service.
The Half-Day acquisition should add about $1 million in annual revenue. More importantly, it adds over a million in real estate and equipment value to the SBID balance sheet, and was completed for just $1.3 million in cash and stock. With the completion of the Half-Day acquisition and a firm financing commitment under its belt, the Company turned its attention to several of their own television production projects.
At the January meeting of the National Association of Television Production Executives (NAPTE) in Las Vegas, the Company’s Television Division scored big with several of their own projects. A Frankie Avalon musical variety special titled “Let’s Do It Again” will begin pre-production in the next several weeks, and is expected to air in 90% of U.S. homes sometime in the fourth quarter.
The Television Division’s series “PCH” also received an excellent reception. Developed from the movie by the same name, the series stars Casper Van Diem, Denise Richards, Jack Scalia, Elliot Gould and Sally Kellerman. “PCH' is expected to clear over 40% of the US market by April 1, 2001 and the Company anticipates clearing an additional 30% by June 1.
This success will make the program available to 70% of the US market, with foreign pre-sales of $7 million, giving SBID the green light to start production by late fall of 2001. SBID also retains the syndication rights to all programs developed internally, which only serves to increase revenue and shareholder value as additional projects are successfully rolled out.
Ever the dynamo, Mr. Vellardita was at it again last month. On February 15th, SBID announced the signing of a letter of intent to acquire Tri-Crown Productions and several of its affiliates. The acquisition is subject to each company performing their own due diligence, and signing a definitive merger agreement, and is expected to close mid-year.
Tri-Crown Productions presently enjoys annual revenues of approximately $15 million and holds assets that include a postproduction facility with equipment and a library of television shows and documentaries. The company has a well-established 14-year history within the entertainment industry.
Tri-Crown has produced weekly series and specials for ABC, NBC, CBS, FOX, FOX Sports, FOX Family, Warner Bros., Telemundo, Universal, Sony and Disney. Tri-Crown's library continues to grow with programs shot on location around the world.
SBID considers the deal will make Tri-Crown a substantial partner in creation, production and distribution and will help grow the company and increase revenues, thereby further increasing shareholder value. At the time of closing this acquisition, Mr. Vellardita anticipates the acquisition will contribute revenues of approximately $25 million for 2001 and projects revenues of over $150 million over the next five years.
The story on SBID should only continue to get better, especially with the demand for content continuing to increase dramatically. As a result, the market for SBID’s services and projects should only continue to improve. We believe it’s time to go after SBID today! To visit the Company’s website and start your own due diligence, please click here. |
