PCI

Agglomeration 2.0™ Umbrella

In order to empower SME owners and enable them to transition their business from a small, founder-lead company into a larger one, that enables scale, unlocks liquidity, and allows them to maintain control over their business, the Agglomeration 2.0™ Umbrella Model was created.

Contrary to most “standard” mergers & acquisitions, our collaborative Model allows owners to:

1. Grow bigger, faster: Achieve operational and balance sheet scale instantly, which provides access to larger contracts and clients whose strict procurement guidelines usually precludes the SME's from bidding.
2. Have access to capital: This Model offers a smooth and steady low risk route to access private equity funds and later on public market funds, while allowing the owners to retain full control of their operations.
3. Have access to complementary skills: Owners are incentivized, through their equity interests and a transparent earn-out structure, to innovate and collaborate by tapping into complementary skills within the Agglomerated group.
4. Grow through acquisitions: Owners are also able to pursue inorganic growth opportunities under this model.
5. Have access to more talent: The holding company offers corporate support to ease the transition from a pure private to a more collaborative environment.
6. Have access to resources for implementation of Industry 4.0 technologies: Only a collaborative can afford the R&D into which/how new 4IR Technologies will improve the participants bottom line, their actual implementation, including the hiring of expert talent.
7. Be part of a network of people and enterprises that grows exponentially with only a marginal increase in its connections: Gaining that network advantage means that a group of companies stand a better chance at out-competing others and acquiring more market share.
8. Open PDF document to find dozens more benefits from Agglomeration.

How to do it successfully

Our Associates developed a tried & tested blueprint for a successful Agglomeration 2.0™. Here are the steps:

1. Understand the market
2. Numbers analysis
3. Incorporate the holding company
4. Trade shares to founders
5. Virtual Merger: low-risk and high-yield stock.

Understand the market

The Agglomeration model works only in a fragmented market where lots of small businesses are run by talented people, who have reached the limits of their current potential. Some of them know that the way to move forward is using an M&A. Often they don’t know how to do it, or Ego's get in the way.

To be able to speak effectively to other companies about joining the group, you have to understand their needs. Since we personally have been many times through the problems that small businesses face, our pitch is very effective.

Numbers analysis

Do the numbers. Under our model, companies need to be profitable, debt free and audited. This is a model only suitable for the top 10% of SME's.

Incorporate the holding company and swap shares

Their VIRTUAL MERGER Model requires a swap of 100% of the company's shares for shares in the holding company. A full 100% is needed to minimize the risks to outside investors, and puts everybody on the same footing.

Virtual Merger: higher profits lead to higher yielding stock

While efficiency improvements are implemented, non-controlling, smaller, smart investors are invited in, and new acquisitions of similar companies continue to take place.

Public Offering of the Holding company shares

Proven progress and consent of shareholders will eventually lead to offer stock to small private investor groups, as good news updates drive interest in those type of shares. Issuing the first dividend is a watershed moment in the life of any stock. The sooner a dividend is issued, the better. As all companies are profitable and debt-free, a very high dividend plan is feasible.

Frequent communication and reaffirmation with the companies' founders throughout the process is key. Except for audited & recasted accounts and legal sign off on certain documents, this whole Agglomeration process can function without lawyers, accountants, and traditional advisors.

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