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Global Secure Big Guns Will Not Hurt Proposed IPO
By James. H. Smith
November 09, 2005
While there appears to be no landslide of initial public offerings (IPOs)
destined to launch before the end of this calendar year, at least one
offering in the defense sector is in the pipeline.
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The end of the calendar year has traditionally been a period in which
companies rush to launch IPOs. Not this year however, given current market
conditions.
According to published data, the fourth quarter of this year has so far rung
in slightly over US$2 billion in IPO issuance. It is unlikely -- if not
impossible -- at this advanced stage of the game, that the IPO market will
come close to the over US$16 billion in IPOs that hit the market in the
fourth quarter of 2004.
Global Secure Corp has recently tapped major talent to demonstrate that the
company is serious about business -- serious enough to launch an IPO in a
market that has seen a fair number of pulled and postponed offerings as well
as offerings priced well below expectations.
The Washington, DC-based company, which provides an integrated platform of
products and services for the homeland security industry, plans to come to
market with 8.25 million common shares priced at between US$8 and US$10 per
share.
Specifically, Global Secure provides data management, analysis and
dissemination services associated with potential biological threats,
emergency messaging and collaboration software, specialized training and
emergency response exercises, and personal safety products.
The offering is to include 7.6 million shares and stockholders are selling
about 700,000 shares, according to an amended offering document filed with
the US Securities and Exchange Commission (SEC).
Underwriters will have the option to buy another 1.2 million shares to cover
over-allotments.
Those underwriters are Morgan Keegan & Co, Jefferies & Co and Thomas Weisel
Partners.
The company is seeking a Nasdaq listing under the symbol "GSEC”.
The company is expected to use net proceeds from the IPO to fund future
acquisitions and strategic partnerships, expansion of sales and marketing
channels, development of new products, repayment of debt and for general
corporate purposes.
The company will not receive any proceeds from the sale of shares by the
holders, the filing said.
To demonstrate its plans to become a major force in the homeland defense
sector, Global Secure has made two high-level appointments in the last
several months.
In mid-August, Charles A Hasper joined the company as chief financial
officer (CFO) and director. Hasper will provide guidance concerning banking
and financing arrangements, as well as implications of merger and
acquisition activities.
From August 2001 until July 2005, Hasper was the CFO and treasurer of Allied
Defense Group, Inc, a company listed on the American Stock Exchange that
holds various defense and security businesses. From April 1998 to August
2001, he was the Washington-based partner of Carroll-Kapfhamer Capital
Partners LLC, an Atlanta-based investment banking firm, responsible for
managing both buy side and sell side acquisition transactions.
At about the same time, Global Secure announced that Ambassador L Paul
Bremer, former presidential envoy to Iraq, would serve as chairman of the
company's advisory board.
Bremer served in that capacity from May 2003 until June 2004. Since
returning to the US, Bremer has been speaking and writing a book about his
14 months in Iraq. He also was chairman of the bipartisan National
Commission on Terrorism and served on the president's Homeland Security
Council.
From October 2000 to May 2003, Bremer was chairman and chief executive
officer of Marsh Crisis Consulting Co, a crisis management firm owned by
financial services company Marsh & McLennan. From 1989 to 2000, he was
managing director of Kissinger Associates, a strategic consulting firm
founded in 1982 by former Secretary of State Henry Kissinger.
Ambassador Bremer served within the US State Department for 23 years,
including three years as ambassador to The Netherlands. He was US
ambassador-at-large for counter terrorism from 1986 to 1989.
For the year ended June 30, Global Secure reported a loss of US$5.6 million
on revenue of US$11.9 million.
In the previous fiscal year, the company reported a loss of US$3.3 million
on revenue of US$5.1 million.
C Thomas McMillen, Global Secure's co-founder and holder of about 12 per
cent of the outstanding shares prior to this offering, is a founder and
principal shareholder of Fortress America Acquisition Corp, a blank check
company that recently completed its IPO.
The stated purpose of Fortress America Acquisition is to acquire an
operating business in the homeland security industry.
It is possible that the Fortress America Acquisition will become a
competitor of Global Secure if the business it acquires serves the critical
incident response market.
But regardless of Global Secure's recent past performances, the addition of
the two high profile personalities can't hurt the company's chances going
forward and may provide the extra impetus to successfully launch its IPO.
Disclaimer
James Smith is an independent columnist for this web site. James Smith may
hold long or short positions in any of the stocks mentioned in this article
and those positions can change at any moment.
InvestorIdeas.com Disclaimer:
www.InvestorIdeas.com/About/Disclaimer.asp, InvestorIdeas is not
affiliated or compensated by the companies mentioned in this article. James
Smith is a freelance writer. Nothing in the articles should be construed as
an offer or solicitation or recommendation to buy or sell any specific
products or securities. Past performance does not guarantee future results.
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