Ledecky Plans IPO of UniCapital Corp.
By Beth Berselli
Ledecky, who built U.S. Office Products Co. into a $4 billion company in three years by acquiring about 200 office supply dealers, is now selling up to $629 million in stock in his latest venture, UniCapital Corp.
Ledecky's new company, based in Bay Harbor Island, Fla., will consolidate equipment-leasing firms into a new public company, according to documents filed with the Securities and Exchange Commission on Friday. UniCapital, which will include a dozen founding firms, will help companies finance leases of items including aircraft, trucks, computers, telecommunications equipment and vending machines, the filing said. While a co-founder and major shareholder, Ledecky will not have an active management role in the company.
But in the U.S. Office Products tradition, UniCapital will consolidate back-office operations while offering new services to customers. For example, customers would be able to lease computers, phones, delivery trucks and vending machines from one company instead of as many as four. UniCapital said the consolidation will provide the founding companies with greater access to capital at lower cost, giving them a leg up on competitors.
UniCapital did not disclose how much of a stake would be sold to new investors, offering the $629 million figure as an estimate of the maximum offering price in order to calculate a filing fee, according to the SEC documents.
However, industry sources said the company probably would sell about 27 million shares in the $20-a-share range.
UniCapital is company No. 4 for Ledecky, who is becoming known as a leader of "roll-ups," a business strategy that involves building big chains by buying smaller, local companies in industries where there is no national leader.
Wall Street is becoming increasingly infatuated with roll-ups, analysts said.
"They've been a growing percentage of IPOs," said Ken Fleming, an analyst who studies IPOs at Renaissance Capital Corp. in Greenwich, Conn. "You're seeing just about everything being rolled up, from oil service to chauffeur-driven limousines to flower delivery," he said.
Ledecky did two roll-ups last year, consolidating the flower distribution business into a company called U.S.A. Floral Products Inc. and the facilities management business into a company called Consolidation Capital Corp. Both companies, as well as U.S. Office Products, are based in the District.
At the time Ledecky took Consolidation Capital public, he had not decided what business the company would be in. Still, the IPO raised almost $500 million, largely on the strength of Ledecky's name.
"He's got a very good track record," said Brad Cohen, a senior analyst at Sands Brothers & Co. in New York.
Because SEC rules limit statements by companies about to go public, Ledecky would not comment on the UniCapital offering yesterday.
The new venture comes barely a month after Ledecky announced plans to split up U.S. Office Products into five companies, each publicly traded and each narrowly focused. The company said a languishing stock price, and not any weaknesses in the roll-up concept, prompted the reorganization.
As with U.S.A. Floral, Ledecky will serve as nonexecutive board chairman of UniCapital. He is instead focusing his efforts on Consolidation Capital, of which he is chairman and CEO.
Co-founder Robert New, a 33-year-old Florida entrepreneur who sold his business to U.S. Office Products and then was a consultant to the company on more than 40 acquisitions, will be UniCapital's chairman and chief executive.
On a combined basis, UniCapital reported $238.4 million of revenue and $22.9 million of net income last year, excluding extraordinary expenses related to founding the company and going public.
The stock offering will be handled by Morgan Stanley Dean Witter, Salomon Smith Barney and Arlington's Friedman Billings, Ramsey Group Inc.
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