LD Holdings, Inc. (LDHL) is a financial and management holding company focused on a niche business opportunity created by changes within the Baby Boomer generation, the largest demographic group in America. An overwhelming amount of the 25 million small businesses in the United States will be sold in the next 15-20 years as Baby Boomers begin to transition out of business ownership and into retirement. Employing a strategic three-step approach, LD Holdings seeks to take advantage of this shift by acquiring multiple profitable business entities to produce venture capital returns while mitigating the risks associated with venture capital start-ups.
LD Holdings is currently targeting acquisitions in four sectors: biomedical, tech, entertainment and the green sector. The company recently secured a $10 million line of credit from a qualified institution to pursue its acquisition targets. This credit facility will enable LD Holdings to complete its first three acquisitions, which will total $16 million sales and $2.3 million EBITDA. The company anticipates closing on the acquisition of its first target, which is in the green sector, in the third quarter of 2014.
By merging acquired entities into cohesive business units, LD Holdings sees its potential to generate revenues of more than $30 million during the first five years of active operations.
With qualified management and a firm understanding of small business, LD Holdings is positioned to capitalize on the changing dynamics of the Baby Boomer generation while enabling investors to diversify their investment by owning several companies with increased valuations in various sectors rather than just one company at a time.
- Focused on Largest Demographic in America
Strong, Multi-Faceted Acquisition Strategy
$10M Credit Facility for Initial Acquisitions
Operating Through 2 Efficient Business Units
Targeting Companies in Four Key Sectors
LD Holdings’ business model and services are carried out through two key operating divisions, each with distinctive responsibilities throughout the acquisition and operational processes.
The Business Services Division includes the buyers, managers and investors of the prospective companies; the Business Operating Division will manage the portfolio of companies in which LD Holdings will hold varying percentages of ownership.
At the corporate level will be the support professionals that will be needed in various capacities by all of the acquisitions.
Portfolio Expansion Process
LD Holdings’ Business Services Division is the heart and soul of the company. It’s where the acquisitions are found, due diligence is performed, and investors are sourced to provide the funds to purchase a target company. For further support, either the acquisition target’s existing management and/or individuals in LD Holdings’ database of young entrepreneurs will complete this acquisition team to grow the parent LD Holdings through a 3-Step process:
Keep an existing database of target companies that meet company criteria, and continually source and locate new businesses for sale. This allows the company to look for synergistic opportunities to combine one or more acquisition candidates at some future date. This database also provides LD Holdings with a historical perspective of different industries and distribution channels along with any type of geographical variation in the valuation of businesses.
Much like the residential housing market, where sellers hesitate to reduce their asking price only to find themselves “chasing the market lower” as transactional prices steadily decline, people tend to remember the past worth of their asset rather than what the asset and terms of sale are in the current market environment.
Maintain a database of entrepreneurs with specific backgrounds and expertise that will be available for both acquisition evaluation and strategizing the post-acquisition business model once the financial aspects of the transaction are determined. Particular attention will be given to developing relationships with those entrepreneurs and managers that want a career opportunity to perform in a results-driven environment, which has the associated incentives in place to create personal wealth for them and above-average returns for the company’s stockholders.
Keep an ongoing database of investors who share the company’s vision and objectives. LD Holdings is searching for long-term investors willing to hold their positions for at least a year, desirous of superior rates of return and looking for ground-floor opportunities.
LD Holdings currently has a database of 250,000 potential companies, 800 entrepreneurial leaders, and a growing number of institutional and non-institutional investors.
Baby Boomer Market & Strategy
There are currently more than 25 million small businesses in the United States, and economists estimate that of these, small businesses with an aggregate value of more than $17 trillion will be sold over the next 15-20 years. A stunning majority of these businesses is owned by the largest demographic group in America, which represents 78 million Americans: the Baby Boomers.
Using this as a focal point, LD Holdings has identified a significant business opportunity to fill an impending void in the small business space. As the Baby Boomer generation rounds the corner to retirement, LD Holdings’ strategy is to become a “known buyer” for those individuals looking for an exit strategy into retirement.
Because of the difficulty of financing and lack of competition in this area, LD Holdings sees an opportunity to buy great value.
The First Value Driver is the ability to bring together smaller non-transparent, non-liquid private companies and build larger public company groups. This allows for higher valuations because of size. Secondly, the valuation differences between private and public companies in this small company sector are 2-3 times higher for public companies. The Third Value Driver is to bring in younger entrepreneurial, highly incentivized leaders to replace the retiring owners, which will drive organic growth through superior marketing, sales and technology skills.
LD Holdings initially will focus on profitable companies with $25 million in revenue or less, and those with existing management and personnel, brand equity, customers and cash flow at discounted prices. The company will then attempt to produce Venture Capital-type returns without venture capital risks of a start-up company.
The five-year plan is to accumulate at least 50 of these small companies and to meld them into cohesive business units whenever possible. Using a conservative $10 million of revenues as an average, this will result in consolidated total revenues of $500 million by 2018.
The company's initial focus is on four broad business sectors that are aligned with the goal of doubling each company's value over a three-to-five year period of time:
- Financial and Business Services
LD Holdings will be aggressively using the Internet and various major investor groups to find Angel Investors that are looking for a higher than normal rate of return to provide the capital while the search for these business acquisitions is being conducted.
To help accomplish its funding objectives for acquisitions, LD Holdings has established two affiliated websites to assist private investors: nanocapnation.com for U.S. based investors; and for international investors, nanocapglobal.com, which will serve as the focal point to develop financing centered on a qualified and screened database of 1,500 accredited investors (Angels and Institutions) and 1,500 non-accredited investors.
Within these investor groups, there would be a core group of 300 investors designated as “The Platinum Group.” This group of investors will be given first look at any transactions deemed suitable for them.
With more than 25 million small businesses in the USA, and $17 trillion worth of businesses expected to be sold over the next 15-20 years, there will be many opportunities for wealth generation.
However, financing the purchase of companies that have sales of $25 million or less and earnings of less than $4 million, has been difficult and now with new banking regulations is almost impossible. LD Holdings intends to help investors capture this wealth generation by sourcing companies for sale, doing the proper due diligence, and if they meet LD Holding’s criteria, acquiring these companies.
LDHL intends to move its acquisitions into the public market and acquire these companies for $0.50 to $0.75 on the sales dollar while financing them for $1.50 to $2 on the sales dollar due to the public market leverage of 2-4 times.
Top 10 Reasons to Invest
- A mature management team that is shareholder conscious and committed to the company’s scalable business plan with a huge untapped market.
Focused on business acquisitions that are successful with a history of profits and cash flow that may produce venture capital returns without venture capital start-up risks.
A publicly traded company that has liquidity and transparency.
Investors have a chance to diversify their investment by owning many different companies rather than just a single company.
Funding sources available as a public company that aren’t available to a private company allowing the company to do private placements and public offerings.
Publicly traded stock can be used for stock options to structure acquisitions and incentivize managers and employees.
The company is in the early stage of development that may allow investors to achieve significant returns.
Organic growth from existing managers or young entrepreneurial managers giving them the ability to ramp up and scale the companies to increase sales and profits.
Purchasing companies at 3-4 earnings and finance them for 6-10 times earnings, which is the arbitrage between public and private companies, significantly increasing the valuation to these companies and LD Holdings.
Management practices low-cost operations and is totally committed to the growth of the company.
LD Holdings, Inc.
1070 Commerce Drive Bldg 2, Suite 303
Perrysburg, OH 43551
Phone: (419) 873-1111
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