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From private to public company

Discussion in 'Beginner's Lounge' started by adamwilson412, Jun 25, 2019.

sentifi.com

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  1. adamwilson412

    adamwilson412

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    We are located in Australia and putting together a national food service distribution business by acquiring already operational businesses with strong financials and greater than 15 year trading history.
    Once under our control each business allows a limited number (400) of the customers currently using the service to buy into the business they are helping to build.
    Their buy in will give them access to shares share of the profits and group discounts.
    By having our end user's part of the business we will increase our sales revenue dramatically.
    The final part of this process is to reverse merger onto the ASX, with the increased revenue and earnings multiplier from private to public brings it will bring all our investor partners a great windfall.

    My question is would you invest in this if $10,000 gave you 100,000 shares at listing limited to 200

    Would you invest in this if $10,000 gave you 50,000 shares at listing limited to 200

    What could be added to give a level of confidence for investment

    What pitfalls do you see to the process

    Has anyone carried out this type of venture before.
    Cheers Adam
     
  2. jbocker

    jbocker

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    Sorry Adam. No way for me. I have not carried out a venture like this, but tried investing in one, got a bad burn only just two weeks ago from a similar sounding venture (albeit real estate rentals). Found out via a news telecast of its collapse it didn't make it to IPO. Now in Administration.
    Good Luck.

    Look up Stirling First.
    https://thewest.com.au/business/com...and-investment-group-collapses-ng-b881191312z
    https://thewest.com.au/business/ste...about-collapse-investors-money-ng-b881230375z
     
  3. adamwilson412

    adamwilson412

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    Can you shed more light on the deal as we are purchasing already operating businesses.
    Our investors will be preferential debt of 4 million against 12 million if business value.
    So I would really to know more about your transaction
    Cheers Adam
     
  4. adamwilson412

    adamwilson412

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    I had a quick read through but it didn't really explain the debt to equity profile or where your funding sat in the scheme
    It's a great opportunity to shed some light if your open to having a discussion
     
  5. jbocker

    jbocker

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    Not Sure I can for the moment. I am a in a recovery process via the administrator. I also have no real access to the facts or the original deal, as I have shifted and nearly everything is in storage.
     
  6. adamwilson412

    adamwilson412

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    Ok well best of luck
    We are making sure our investor proceeds are paid first through preferences and type of debt held for future investment always understand where you stand when the **** hits the fan.
    Keep in touch when you can
     
  7. So_Cynical

    So_Cynical The Contrarian Averager

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    Stirling First - why would someone pay 200K to lease a house/unit for 40 years..i dont get it, can someone please explain?
     
  8. adamwilson412

    adamwilson412

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    Just so you know we are not part of the Stirling First raise
    But I'm interested to understand people's perceptions to investment for our benefit and to help educate those who come on board with us to fully understand their risk reward profile
    Cheers Adam
     
  9. Value Hunter

    Value Hunter

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    adam, generally speaking rollups have a bad history and a very low long-term success rate. Almost all seem to unravel at some point.

    And what specifically do you mean by food service distribution? Are we talking about transport companies that move food around? Restaurants? Food wholesalers?
    Also it sounds like it would be a commodity business that would be operating in a very competitive space. Does the company have any sort of competitive advantage?
     
  10. jbocker

    jbocker

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    Might be able to explain a little later. I was NOT one of those caught for a large amount.
     
  11. adamwilson412

    adamwilson412

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    Hi value hunter
    Its food distribution to restaurants takeaways sandwich shops.
    The industry is valued at 79 billion and yes is competitive the 2 largest players are bidvest and pfd both above the 3.0 and 1.8 billion range.
    Our competitive advantage is having the end user buy in to what they are growing.
    We are taking 5 existing entities all turning over circa 20 million so not a ground up start up.
    Our strategy is completely focused on the end user buying into the group and building the business through their business
    400 end users all spending their weekly budget through what they are a part owner of is key to the success of the group.
    400 x $5000 per week takes each state to 100 million in turnover.
    Cheers Adam
     
  12. adamwilson412

    adamwilson412

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    Good to hear I'm very risk reward driven and knowing where you stand in the debt profile its extremely important
     
  13. So_Cynical

    So_Cynical The Contrarian Averager

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    Ok Adam - so why are these 400 customers/investor going to buy from you rather than PFD etc? is there a clear cost advantage for them? how can you provider cheaper than the big players?
     
  14. investtrader

    investtrader

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    Seriously?
     
  15. adamwilson412

    adamwilson412

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    Ok so its not just 400 its 1800 nationwide 400 in each of the Eastern states.
    There are a multitude of reasons why people buy from where and whom otherwise we would all just race to the bottom and what a wonderful world that would be.
    Size in business does not always mean cheaper prices as they have responsibilities to share holders, in investment in infrastructure, additional personnel and the biggest cost waste.
    There are other factors which effect our decisions at a personal level, if you had 2 restaurants both serve identical meals identical environment one is however cheaper.
    The more expensive restaurant greats you at the door using your name asking about your day your family how your holiday was seats you at your favorite table interacts with you throughout the night all this is no cost to the restaurant.
    The other does none of these but the price is right, now both will have customers that will be loyal to them and this is what makes business so special there is always a way to compete.
    The other reason is they are going to be shareholders in the business they are building and get the rewards of share ownership.
    If we have a total investment of 20 million and 150 million shares we are at 13 cents per share.
    When we increase the turnover and take in the added value going public thats the real value for investors.
    Our plan and goal is to raise turnover in each state to 2.5 x current this would give us 250 million total sales,and a market cap of 1 x earnings.
    250,000,000 / 150,000,000 shares
    $1.66 per share
    So I put this in front of all our customers show them the debt position of a convertible loan being a preferred creditor should it not happen as planned and leave it up to them to make a decision. Is this for everyone no will there be nay sayers yes we can't worry about what people think they will do that on their own.
    I truly thank you for your interest and questions
    Cheers Adam
     
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