Edward Palonek has been involved with various business ventures throughtout his career - one of which is taking companies public.

The article below shows Palonek's involvement in helping private company go public other than the normal IPO route.

"Winning at the shell game"

A company's struggle to go public often ends at the underwriter's or after a security commission's rebuff. However, an innovative and cost-effective capitalization technique enables many private companies to use dormant public ones, often called shells, as vehicles to gain access to the public market.

A shell is a public corporation that has no operations, merely some assets, some liabilities and some stockholders, who are indifferent to their investment because the stock has not traded for a long time. Shells exist because underwriters take companies public before they have a proven product or an idea for a successful business. Shells are often found among speculative or time-dated industries such as mining and solar energy. Through a procedure known as a reverse takeover, a startup company can make a public offering without going through a costly and time-consuming underwriting process.

Consider Privco, for example, a private company that wants to go public but has been rejected by a number of underwriters. It learns of a public company, Pubco, with a number of outstanding shares in its treasury that have traded a minimal value for a number of years.

Privo's board of directors must first convince the directors of Pubco to take over Privco through an exchange of shares. Privco would then become a wholly-owned subsidiary. Pubco reissues its shares so that Privco shareholders own a majority. Pubco's original shareholders, now a minority, benefit because they have a piece of a company that is active and likely to increase in value.

Taking the reverse-takeover route does have its advantages. In many cases, Canadian underwriters won't consider a business with less than $10 million in assets. With this approach, a company can bypass the regular procedures and spend little money until the stock is trading.

Locating shell candidates is a time-consuming task, but takeover consultants can help. They can lead you through the maze of financial of financial and legal requirements necessary to a successful transaction.

Picture Data Inc. (PDI), a computer-graphics company in Toronto, was a private company with good prospects. It wanted to make a public offering but was unable to raise the necessary capital. It contracted Edward Palonek, a takeover consultant in Toronto.

After scrutinizing the company's business plan, past performance and projected revenues, Palonek decided it was a good risk. He then found a suitable take-over candidate in Hamilton, Ont., Dreadnought Investments Ltd., a real-estate holding company. When Palonek approached them, Dreadnought's board of directors were negotiating a buyout with an accounting firm in Toronto, which had offered them less than 1% per share. Palonek proposed a reverse takeover and Dreadnought agreed.

The 2 companies completed the transaction in March, 1986, and PDI became a wholly-owned subsidiary of Dreadnought. Dreadnought began trading over the counter in Ontario at 40 cents a share; 8 months later, its shares were trading a $1.40. The increased capital enabled PDI to expand its marketing and research division and resulted in new contracts with companies in the computer industry.

The above excerpt was taken from the Small Business Magazine, November 1986 edition, written by Martyn Kendrick.

For further information about Edward Palonek try some of these other sites:

Edward Palonek Scholarship Contribution to "Hillfield Strathallan College Scholarship fund for Science Merit Recognition"
Edward Palonek founder of Foundmoney.com Free Money search for unclaimed cash.
Edward Palonek Contribution to the Palonek / Eva Rothwell Resource Center - a "New Life for a Grand Old School"
Edward Palonek The Man behind the Opportunity - "Setting Out to Set Things Right"
Edward Palonek Can You Make Money On The Net! Find Out How Edward Palonek Did.
Edward Palonek Revitalizing dying companies - Find Out How!
Edward Palonek Scholarship Contribution to the Mohawk College of Applied Music Program
Edward Palonek Proud Sponsor for the "Licensed to Learn" - the Tutor Certificate Program.
Edward Palonek The Best Ways to Find Money that you did not know you had, according to E. Palonek.
Edward Palonek Winning at the Shell Game.
Edward Palonek Charity Contribution to the "Steeltown Friends of Mohawk Colledge Music"
Edward Palonek Mohawk Students and Eva Rothwell Resource Center.
Edward Palonek Oprah Winfrey Show including North American Television Tour
Edward Palonek Eva Rothwell Resource Center Officially Opens.
Edward Palonek More great news for residents around Eva Rothwell Resource Center.

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