How we work:-
Creation of or sourcing of a listed Holding Company for Agglomeration
Select of mature, debt-free and profitable (“subsidiary”) for Agglomeration
Acquisition of respective subsidiaries by the Holding Company through the issuance of public-listed shares in Holding Company to original owners of the subsidiaries
The lack of wealth distribution is the cause for much of the world’s inequality and under lying problems. 99% of all firms in the USA are SME business owners who employ less than 500 people, yet they work a lifetime for a hopeful reward of a retirement sale, if they, or the company make it that far.
During this time, they risk their own financial future and cannot access the latent capital that is held in the private company shares.
I promote a much better way of working, where you can have (and keep) your cake whilst enjoying eating it at the same time, let me introduce the democratic IPO.
Broadly, we create a group of similar companies in a similar sector and reverse the shares of each company into a holding company (like a roll up but with no sharing of platforms, premises or anything else). Each company remains independent from the others but has one seat and one vote at the holding company table.
Above this, we add a listed holding company with a professional board, who deal with stock market compliance, investors information and financial reporting. Essentially, all done on your behalf.
You share best practice with your fellow PLC company owners at regular virtual meetings, with your competitors now encouraged by you to do well, as the share price is now dependant on group success.
The listing creates a capital event, which after an initial lock up period can be freely traded on the markets.
This is a unique type of collaboration where a group of SMEs from similar and adjacent industries join forces and list publicly on a global exchange and then grow further through organic and inorganic activities.
To join an IPO, each business owner exchanges shares in their business for public-listed stock in the central holding company. Each business must be mature, profitable and generally debt-free with similar or complementary services and be run by highly talented leaders in their field. As part of the process, each successful business owner is given the freedom to continue to run their business in their own way, helping to ensure that the talent that built the business in the first place continues to build the business in the future.
What are the benefits for SME owners?
This model was created for SME owners to empower and enable them to transition their business from small, founder-lead into a large multinational company. It enables scale, unlocks liquidity, but unlike “normal” mergers and acquisitions (“M&A”), it allows owners to maintain control over their business.
1. Bigger, faster
Achieve operational and balance sheet scale instantly, which provides access to larger contracts and clients whose strict procurement guidelines usually preclude SMEs from the bidding process.
2. Access to capital
The model offers a smooth and steady risk managed route to accessing capital while allowing business owners to retain full control of their operations.
3. Complementary skills
Business owners are incentivised, through their equity interests and a transparent earn-out structure, to innovate and collaborate by tapping on to complementary skills within the PLC.
4. Grow through acquisitions
Business owners are also able to pursue inorganic growth opportunities under the model.
5. Access to talent and services
The central holding company offers corporate functions support to ease the transition from the private-to-public market.
6. Pointing to the PLC
Being part of a PLC means when pitching for larger contracts/tenders there will be great credibility created by pointing to the PLC and saying we are part of XYZ Plc with a market capitalisation of £50-100m.
7. Recruit & Retaining the Best Talent
Whilst you can offer shares in a private LTD to key people it is difficult to value them & they are not liquid. In a PLC you can grant share options to your key people and they can see (& sell easily) the value of their shares. This can be used to attract & retain the best talent in your industry.
8. Wealth Creation
Because of the vast sums of capital available & liquidity, public companies tend to be valued much more than private entities. In addition, a diverse group of businesses is reduced risk from an investment point of view. So, when you decide it’s time to exit, you sell your shares at hopefully a much greater value than what your business is worth today.