CVSL To Raise $500,000,000 For "War Chest" To Acquire Additional Social Commerce Companies
DALLAS, Dec. 11, 2013 /PRNewswire/ -- CVSL Inc. [stock symbol: CVSL] said today it is raising an additional $500,000,000 to increase its "war chest" for acquisition of micro-enterprise companies that conduct social commerce.
"CVSL has had tremendous success building a base from which to execute our strategy. We're ahead of schedule. We're in eight product categories, we have worldwide presence in 40 countries and we are on a run rate to exceed $150 million in annual revenues. We're very pleased at how much we've accomplished in less than a year," said John Rochon Jr., chairman of CVSL's investment committee.
"Our potential deal funnel of companies who are candidates for acquisition by CVSL now adds up to approximately $8 billion in combined annual revenue. While we obviously won't acquire every company in the deal funnel, there is clearly a vast pool from which to draw as we move ahead with our strategy," Mr. Rochon noted.
"We intend to continue pressing ahead with more acquisitions. We believe the best way to fund these next acquisitions is with capital derived from a debt raise, as opposed to using CVSL shares. Based on our progress and the attractive opportunities we intend to seize, we believe that CVSL shares are significantly undervalued at the moment. So it makes good sense for us not to use CVSL shares as our primary acquisition currency going forward," said Mr. Rochon.
"Returns to shareholders will be better if we use a debt security to fund the next round of acquisitions, rather than using equity. We don't want to dilute the current shareholders, so cash will now be our primary acquisition currency."
"Adding $500 million to our war chest is the best way to fuel the next phase of acquisitions," said Mr. Rochon. "This new capital will be drawn down into CVSL as required to fund acquisitions, and it is important to emphasize that it will not be fully drawn down until required for acquisitions that are accretive to CVSL."
CVSL has retained the services of London-based Wittenborg Capital LLP for this round of debt sourcing.
"We are delighted to be working with CVSL to source debt for their ongoing acquisition strategy," said Thomas Wittenborg, Managing Partner of Wittenborg Capital. "Year to date, CVSL has made extraordinary progress building a business that has demonstrated phenomenal revenue growth. The debt we will be sourcing will add to their firepower and facilitate the forthcoming acquisitions that are key to CVSL's expansion strategy."
With regard to Blyth, Inc., Mr. Rochon noted, "As we indicated that we would do in our November 15 press release regarding Blyth, Inc., we have amplified our proposal, on a confidential basis. We continue to maintain a significant share position in Blyth. As we've said many times, it is our intention that, in any acquisition, there will be no dilution of existing shareholders."
CVSL is a growing group of micro-enterprise companies that connect social media networks into an ever-expanding virtual "community" of social commerce. CVSL companies currently include The Longaberger Company, a 40-year old maker of hand-crafted baskets and other home decor items; Your Inspiration At Home, an award-winning maker of hand-crafted spices and other gourmet food items from around the world; Tomboy Tools, a direct seller of tools designed for women as well as home security systems; and Agel Enterprises, a global seller of nutritional products in gel form as well as a skin care line sold under the Ageless™ brand, operating in 40 countries. CVSL also has signed a letter of intent with Golden Girls, which purchases gold and tradable jewelry, and Paperly, which offers a line of custom stationery and other personalized products.
About Wittenborg Capital LLP
Wittenborg Capital was established in 2010 to intermediate credit in the void left by the withdrawal of traditional lenders. Since inception Wittenborg Capital has worked with a number of high quality private equity and property groups to originate financing and re-financing solutions for clients' assets and acquisitions.
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SOURCE CVSL Inc.