Artfest International, Inc (fka ARTS)

[EDWARD STEVENSON]

The studio, Charity Sports Distributer Inc., and this other candidate sought to outfit Artfest's television and media component, all suggest a common strategy: roll up.

Let's review.

What is a rollup?
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Rollup Advantages.

Properly executed rollups enhance a company's operations, competitive position and financial health. Successful rollups can often achieve the following:

(1)Expand geographic coverage. This often allows the consolidator to service multi-location customers and win larger contracts.

(2)Expand the consolidator's services or product line. This is done by acquiring companies that provide services or products that the consolidator currently does not offer.

(3)Increase name recognition. This is often a result of the two prior points. Increased name recognition further drives the business' momentum and can also provide access to cheaper sources of capital.

(4)Leverage off of the consolidator's infrastructure and spread fixed costs over a larger revenue base. For example, rollups often leverage existing back office operations such as accounting, marketing, invoicing and executive management and consolidate purchasing efforts which increases the company's purchasing power.

(5)Breathe new life into the acquisition targets. "Cross-fertilization" occurs as the consolidator brings fresh blood into the target companies but is also exposed to new ideas itself.

http://www.americancapital.com/resources/uses_of_financing/rollups/basics/basics.html

Recall how each and every individual component (advatages of a roll up) were applied to the acquisition of Charity Sports Distributer Inc., below. Can the same be modelled for this un-named contender? Absolutely. It can be applied to any proficient and logical move (acquisition wise).

Using the (above) five priciples the direct advantages to an acquisition were implemeted in regards to CSD.

(1)Expand geographic coverage.
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(2)Expand the consolidator's services or product line.
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(3)Increase name recognition.
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(4)Leverage off of the consolidator's infrastructure and spread fixed costs over a larger revenue base.
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(5)Breathe new life into the acquisition targets.
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