Electrical Wholesale Supply Roll-Up
AS23-647F
This is an opportunity to invest in the electrical
wholesale industry. This is a $74B industry that supplies electrical
utility companies with poles, wire, hardware, transformers and other
electrical equipment. This industry is in the process of
consolidation.
An electrical wholesale supply cooperative is interested
in selling $3M of preferred shares and $2.4M of common shares to an
equity investor. The cooperative will focus on rolling-up eight
targeted cooperatives within the same industry. The advantages of the
roll-up will be to provide efficiencies with the back-office functions,
eliminate duplicated CEO’s, CFO’s, etc. Also, a large distributor will
gain economic buyer power from vendors.
The roll-up will be facilitated via merger. No funds
will be required to acquire the add-on companies. The merger will be
accomplished by merging balance sheets.
The preferred stock owners will receive 70% of the
platform net profit. Therefore, the preferred stock owners will have no
expenditures to acquire the add-on companies, and still receive 70% of
the net profit.
Net profit for the platform company: Actual: 2003 =
$444,335; 2004 = $1,440,026; 2005 = $1,573,360; 2006 = $1,904,000 est;
2007 = $1,265,265 est; 2008 = $1,228,000 est; 2009 = $923,643 est.
Please note the downward trend in net profit is due to typical
seven-year cycle troughs.
Based on the above numbers, the average annual returns
will be 14.2%. Each merged coop with a similar balance sheet will bring
an additional 14.2%. Therefore, five merged coops with similar balance
sheets will bring 71% of the $5.4M investment or $3,834,000 yearly.
We are seeking a soft commitment from an investor to
acquire the platform. We will then use the soft commitment to approach
eight other cooperatives to consolidate with the platform. The
cooperatives that do not join the consolidation will risk extinction.
Investor is responsible for our fee.
For more information contact:
Bob Hodgson
Office 573-346-4833
Fax 573-346-0046
E-mail:
bhodgson@amvest.com
Corporate Offices:
P. O. Box 1590
Independence, MO 64055-0590
Phone 816-461-3312
Fax 816-461-4644
E-mail:
contact@amvest.com
www.amvest.com
National Investment Bankers Since 1976
