To: Max Harvard who wrote (2657 ) 3/24/1998 11:22:00 PM From: dexx Respond to of 6654
Max, I happened to be passing by and saw your post. I believe WOTD is intending to do what is a called a roll-up. This type of corporation grows strictly through acquisition. The objective is to find a market niche which can exploit a series of economic factors that turn positive when an acquisition threshold is reached (in other words, buying power means lower prices and higher profit margins). I will borrow from an article in USA today that was posted on this thread earlier by someone else. ________________________________ Excerpt from USA TODAY Meet the godfather of the modern rollup. By next month, Jonathan Ledecky, 40, will have had a hand in the creation of eight rollups. In four years, he's gone from financing his first venture with $250,000 on his credit cards to personal holdings worth $200 million. Ledecky is a Washington D.C. businessman who stumbled onto the rollup craze as it was taking off. He hatched the idea of rolling his single-contract stationer with five others, selling stock to the public, and becoming a major player in the office supplies business. Ledecky says he was turned down by 95 of the 100 contract stationers he approached about becoming part of the company. Forty investment bankers rejected the idea before he found one that would back him. U.S. Office Products was born. The $3 billion company rolled up 220 smaller outfits hawking everything from office coffee services to corporate travel. After the stock fell on hard times, Ledecky announced plans to split the company into five publicly traded companies. He has since gone on to co-found a floral wholesale rollup, USA Floral, that has $350 million in annual sales. He raised $500 million in a blind pool last year for Consolidation Capital before deciding to make it a rollup of building maintenance firms. Next: a rollup of equipment financing businesses, UniCapital. "I like sponsoring young, hungry executives who want to do consolidations," he says. _________________________________ Anyway, it appears that WOTD will start with annual revenues of $3.5 Million (probably 10-15% profit). This appears to put WOTD on the board with revenues and profit from the start. I imagine WOTD will buy this acquisition and future acquisitions using money and/or stock. This will likely require additional funding, but probably from sources less stressful to shareholders than Reg. S. Hope this helps. Dexx