Market Facts, Inc.
Example of Minority Investments:
At the time ZS was approached by the senior management team of Market Facts, it was a publicly-traded company with a $30,000,000 market capitalization. The management team was seeking a financial partner to assist it in increasing shareholder value, as well as in structuring and executing acquisitions that had been identified. As a result of its low market capitalization and lack of analyst coverage, the Company’s stock was relatively illiquid, and its stock price bore no relationship to its excellent earnings performance.
ZS was very impressed with Market Facts’ management and their strong earnings track record. After considering various options to address their needs (including a “going private” transaction), ZS purchased shares directly from the Company and on the open market. The proceeds from the direct investment were used by Market Facts to effect a large share buyback, which provided an opportunity for long-time holders of the Company’s common stock to achieve liquidity without impacting the stock price.
While Market Facts continued to execute its business plan, ZS solicited research coverage from analysts and investment firms who had followed other ZS portfolio companies. Our collective efforts resulted in research coverage being initiated with a buy recommendation by a large regional investment firm. Concurrently, the Company closed its first acquisition, with ZS’s assistance. Market Facts then completed a $50,000,000 common stock offering to fund its acquisition program and gain additional analyst coverage.
Management and ZS’s successful implementation of the strategic plan resulted in the Company achieving a market capitalization in excess of $200,000,000 and a price to earnings multiple of 25 times. To address the needs of its increasingly global customer base, Market Facts merged (at a significant premium) with Aegis Group plc, a London-based media buying company with significant international operations.