Event production company seeks BEE partner

The company, now in its 12th year of operation, has offices in Johannesburg and Cape Town, and a satellite operation in Durban, and is acknowledged as being one of this country's most innovative providers of upmarket corporate and private guest experiences.

Loudfire is unique among its competitors in that it is a full production company with extensive distribution capacity via its ownership of a fleet of operational vehicles, massive warehousing and storage capacity in all three cities, and the incredible scalability it offers via employment of more than a 1000 highly skilled casual staff, all trained in Loudfire's in-house Academy. In addition to this, the company has a huge event asset base comprising over 120 freestyle tents, custom bars, designer lounge furniture, sets and props, ambient lighting as well as AEG Turbo ovens, power generators, and a whole host of other operational gear.

According to CEO Bruce van Halderen, it is this philosophy of ownership and the focus on margins that has enabled the company to deliver guest experiences of an unparalleled high quality, while outsourcing very little indeed and retaining highly competitive pricing structures. Indeed, these factors are what make Loudfire one of the most profitable companies in the industry.

He adds: "Loudfire is a mature, established business that is ready for transformation. Initially, we will be looking to sell 26% of the business before the end of 2006, with a view to selling a majority stake by 2009. So, with immediate effect we are commencing a focused, proactive campaign to find the right BEE partner via direct approaches to those parties we are interested in getting to know better and also by using PR to publicise our search and so invite further BEE investors, whom we might otherwise not have considered, to approach us.

"The rationale for this approach is that as a newcomer to the BEE playing fields, we are finding it immensely frustrating finding our way around. There is a lot of published dialogue available regarding where you need to end up and scorecards for when you get there, but very little in the way of practical guidelines on how to actually get there. Perhaps this is a result of the secrecy and lack of transparency that seems to be underlying so many of the deals out there. It goes without saying that wherever this is the case, no process can ever be open or honest. Certainly that situation isn't helping to make BEE as broad-based as it should be."

In addition to being frustrated as regards the process, van Halderen says he has also found that it is difficult for companies like Loudfire, that fall within the R14 to R50-million turnover bracket, to find and meet serious BEE investors.

He explains: "In this bracket, you're not big enough to be taken seriously by the big investors and not small enough to benefit from SME initiatives. It really is a bit like being 30-something, single and looking, except that for individuals there are any number of forums where you can meet likeminded people, but none for companies seeking BEE partners."

Necessity being the mother of invention, van Halderen has decided to be the catalyst in the creation of a monthly forum where companies in the same situation as Loudfire can meet and interact with what he hopes will be a new crop of serious BEE investors, as opposed to the usual suspects. To this end, he has approached a specialist relationship marketing consultancy with a proven track record in similar initiatives with the suggestion that they establish and run the forum with funding obtained via relevant sponsorships. Loudfire itself has committed to acquiring and providing venues for the initial meetings.

A forum such as this will indeed be highly beneficial to mid-sized companies as they prepare to embark on a process of transformation from a BEE perspective. Moreover, not only will it serve to put likeminded sellers and buyers in the same place, but it will also provide a platform for discourse on the BEE process. Like any marketplace, it will put likeminded buyers and sellers together in an open forum.

For van Halderen, it's about being totally committed to BEE for the long-term and therefore serious about finding the right partners, first time. He adds: "Loudfire is, as a matter of fact, already engaged in discussions with several suitors, but it is no secret that we are keeping our options open until we are convinced that we have found partners that are the right fit. Ideally we would like to join a BEE group with an established presence in marketing, advertising, media and/or related industries. Whether that partner will be an institutional investor or an operational partner, and whether we achieve our BEE status via sale or acquisition, is not as important to us as the fact that our partner should share our values."

These values, according to van Halderen, are the cornerstones of Loudfire's business and a partner's compliance with them is not negotiable. They are: Honesty and Integrity; Respect; Kindness and Generosity; Responsibility and Accountability; and Ownership and Commitment.

In addition to its quest to put 26% equity into BEE hands by year end, Loudfire has also committed itself to empowering staff via the sale of a further 14% shareholding to members of its management team, some of whom are previously disadvantaged individuals and meet BEE requirements.

Investors interested in discussing this opportunity further should contact Bruce van Halderen via email or telephonically on 011 262-2082.