About Redux Holdings



     Redux Holdings (“RDXH”) is a publicly traded company that acquires assets of underperforming and distressed companies on a non-cash basis and isolates, recombines and manages those assets to increase their value and to develop profitable strategic options. Redux Holdings is distinguished by the extensive experience of company personnel in quickly identifying, analyzing and stabilizing underperforming and distressed companies or business units and effecting rapid turnaround and asset monetization.

 

     Redux Holdings offers a means for the owners of underperforming and distressed companies to record cash values for sales of the companies, and to secure warrants for possible future appreciation while disposing of unwanted business entities.  Redux represents a new approach to creating value from underperforming and distressed companies. 

 

Redux Holding’s Business Strategy

 

  1. Redux Holdings identifies a target- an underperforming or distressed company, often by referral from investors in the target, and performs a strategic asset value assessment.

  2. If Redux Holdings decides to acquire the underperforming or distressed company or asset, it is first placed in a subsidiary, in order to isolate any potential liability. The “clean assets” are transferred to a new company.

  3. Investors in the underperforming or distressed company are compensated with publicly traded equity in Redux Holdings, in an amount equal to the liquidation value of the company or asset. The investors also are given warrants than can be executed in the event of substantial gains in the value of the acquired strategic assets. Lenders and bondholders in the underperforming or distressed company, if any, may be compensated with warrants.

  4. Redux Holdings turnaround and operations staff provides the operating control for the newly acquired company.

  5. Growth in asset value is accomplished by isolating and recombining components to maximize value and strategic options. As an example, the mature sales force of an underperforming or distressed company may be deployed to sell the products and services of multiple acquired companies. 

 

Redux Holding’s Growth Strategy

 

     Redux Holdings seeks to acquire assets that can be obtained at heavily discounted prices from sellers looking to liquidate assets.  The company also looks to purchase assets that have the opportunity for significant price appreciation.  By acquiring these types of strategic assets, Redux Holdings attempts to maximize return on investment for shareholders. 


Target Market

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     The target market for acquisition by Redux Holdings is the universe of underperforming and distressed business units that have tangible and intangible assets. These businesses typically are mature companies that are delivering products or services with revenues above $50 million a year and which have complete corporate infrastructures.  These companies or business units have become a burden to their owning entity, often due to financial underperformance or because they are a distraction from the core business. 

 

     Target companies for Redux Holdings are likely to be referred from hedge funds, venture capital firms, banks, and other investment organizations seeking better exit strategies. The number of sources of distressed strategic assets is enormous:

 

  • There are approximately 8,350 active hedge funds in the U.S., with about $1 trillion invested (Source: Hedge Fund Association, 2005).

  • In 2000, venture capitalists invested over $100 billion in over 5,000 U.S.-based entrepreneurial companies (Source: National Venture Capital Association, 2006). 

 

     Redux Holding’s principals are highly experienced at identifying, within a matter of days, valuable tangible and especially intangible assets of such target companies.  Often, the owning entity is unaware of the value of such intangible assets.

 

     Because the principals of Redux Holdings have been involved in underperforming and distressed business properties and turnarounds for decades, they have a large base of contacts that can offer underperforming or distressed companies or assets to Redux Holdings for evaluation and potential acquisition.

Business Competition

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     Redux Holdings believes it will have very little competition in collecting strategic assets from underperforming companies.  Acquiring distressed business units is not a new concept but Redux Holding’s approach to the business is unique.  The concept of acquiring “limbo” properties on a non-cash basis and offering cash-equivalent proceeds to the selling entity is original. Equally original is the concept of obtaining companies at bargain prices by targeting companies with “hidden” intangible assets. Except for Intellectual Property, most intangible assets are ignored. Where the intangible asset relates to employees, it is often viewed solely as an expense and not as an asset.

 

     Competition for the distressed assets that Redux Holdings seeks to acquire are likely to come from:

 

  • Distressed-securities investors, such as hedge funds and private equity pools, which acquire distressed and defaulted bonds and bank loans. These entities are almost exclusively interested in financial instruments.

  • Salvage firms and auction houses, which liquidate tangible assets, such as equipment and real estate.

 

     However, these entities are not invariably competitors. Distressed-securities investors salvage firms and auction houses are often complementary to Redux Holdings, and are likely to provide potential companies for Redux to acquire. Distressed-securities investors may purchase the financial assets while liquidation firms buy the physical assets, leaving the intangible assets such as customers, sales channels, prospect data bases, IP, R&D, engineering and infrastructure intact and available for acquisition by Redux Holdings.