What is Industry Aggregation?
Growth Through Collaboration
Global Aggregation Corporation (“GAC”) is building a ten industry collaborative power-house.
Industry Aggregation involves bringing a number of companies together through joint venture style cooperation and, in some cases, stock swaps with a publicly-traded flagship company. Member companies benefit through joint ventures and cross marketing relationships; as preferred vendors and suppliers for one another; through reduced operating costs via volume purchases and other economies of scale; as well as the exchange of private illiquid stock for shares in a public company trading at significantly higher multiples of earnings. Companies are typically aggregated around a common theme such as a market or industry.
Perhaps the quickest way to understand the GAC Industry Aggregation model is by comparing it to the more well-known Japanese “Keiretsu“ which first appeared after the second World War and is credited with contributing to Japan’s rapid rebuilding and emergence as a global economic powerhouse, more commonly known as the “Economic Miracle”. The Keiretsu is typically a group of large publicly-traded industrials who cooperate closely and have interlocking ownership. Each Keiretsu includes a bank as a member to provide financing. In contrast, the Aggregation model focuses on delivering much the same benefits to small to mid-sized privately held companies. The Aggregation’s listed flagship company serves as the combined group’s “banker”.
While the Keiretsu model is still relatively new to the west, certain leading organizations have already adopted variations of it successfully. These include top tier US venture capital firm Kleiner Perkins Caufield & Byers, Cisco Systems, Richard Branson’s The Virgin Group, and Deutsche Bank to name but a few.
There are tremendous benefits to be derived in every operational area from membership in an Aggregation’s combined industry group which is committed to the success of all its participants.
Three Levels of Membership
There are three levels of participation for members of the aggregation starting with simple joint ventures and cross marketing opportunities all the way up to a stock swap with the publicly traded holding company for liquidity and maximum valuation of equity. Each successive level delivers a bigger pay-off to the member entity.
Who is Eligible?
Each of the ten industry aggregations has its own eligibility criteria that starts with the types of companies that offer products or services that fit within its industry or market space theme. Eligible companies then fall into three categories:
1. Industry leaders whose ownership desires a liquidity event at the best possible valuation.
2. Established industry players with the potential to become dominant forces within their industry if given access to the necessary resources.
3. Emerging companies which have the potential to grow rapidly if provided with the necessary resources.
Is Global Aggregation Corporations currently aggregating your industry? Contact us today for additional information on how your business can benefit from participation in GAC’s aggregation model.
Can you afford to be left behind by Aggregation?
An individual company cannot compete with a strategically aggregated company.
An aggregated company cannot compete with 10 strategically aggregated companies.
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
Julius Caesar Act 4, scene 3 – William Shakespeare