If you own a secondary ticket brokerage and you’re interested in selling, Commerce Holdings, Inc., located in Universal City, CA, wants to hear from you.
In an unsolicited letter sent out to several brokers earlier this month, David Clark, the company’s marketing director, spelled out the goals for the company, namely to acquire ticket brokerages that have “At least 1 Million in Gross Sales for over 2 years,” been a going concern for at least two years, and able to “Produce net margins of 23-30%.”
TicketNews reached out to Clark with questions about the company and its mission, but he did not respond. Instead, Dan Drennan, a member of Commerce Holding’s Executive Board sent an email explaining that the company could not discuss any aspects of the plan for fear of potentially violating Securities and Exchange Commission (SEC) rules concerning public offerings or solicitations.
Among the questions TicketNews wanted answered were how much Commerce Holdings has to spend on acquisitions and what multiplier of earnings before interest, taxes, depreciation and amortization (EBITDA) the company was going to use to base its purchase prices.
The company’s first acquisition, according to the letter, was Golden Circle Inc., also of Universal City, CA, and Amir Khalighi, Golden Circle’s CEO, has been named the CEO of Commerce Holdings.
“We believe the secondary ticket industry is about to undergo an evolution, and with that evolution, there will be great opportunities for flexible, integrated, and technology linked ticket brokerage firms. Even though the secondary ticket market as a whole has generated revenues into the billions of dollars, the industry is fragmented into many small to mid-size firms. With the advent and growth of internet sales, many small to mid-size firms are faced with the need for additional capital and technology – while at the same time facing increased internet competition and declining revenues. Concurrently, a small number of larger online ticket companies continue to experience growing market shares and revenues,” the letter states.
“Commerce Holdings, Inc. is a fully reporting public company structured for the sole purpose of consolidation of the ticket brokerage industry via acquisition and roll-up of compatible private ticket brokerage firms into an SEC registered company.”
Last Updated on June 20, 2009 by By Alfred Branch Jr.