Issues & Opinions

Found in today’s PE Week Wire email {sic}:

Gulfstream International Group, a Florida-based passenger flight operator, is to listed on the New York Stock Exchange. The company is looking to raise $14.05 million by selling 1 million shares with an estimated price range between $11 and $13 a share, according to a prospectus filed with the SEC. Weatherly Group backed Gulfstream in March 2006. http://www.twgco.com

The arithmetic there is compelling. But only because of imprecision in editorial form - their S1 filing is a tad more precise, as such things tend to be, and makes clear that they hope to raise $14.95 million via 1,150,000 shares sold at $13.00.

Additional imprecision, or at least confusion, appeared in the fact that the Weatherly Group, at least the one at the link provided in the story, is a recruiting firm, apparently unrelated to the Weatherly Group LLC, which actually invested in the company back in 2006.

It’s easy to pick nits, and so I do - PE Week Wire is always a good read, though its staff occasionally seems to get a bit fancy free during daily creation. Well worth a slot in the day’s email in any event, and signup is available here.

As a side matter, this looks like it’s a strange deal. Witness, from the red herring:

We were formed by Taglich Brothers Inc. and Weatherly Group LLC exclusively for the purpose of effecting the acquisition of Gulfstream and the Academy. In March 2006, we acquired approximately 89% of G-Air, which owned approximately 95% of Gulfstream at that time, and 100% of the Academy, which held the remaining 5% of Gulfstream. Subsequently, we acquired the remaining 11% of G-Air, which has been merged with and into our wholly-owned subsidiary, GIA.

Since 1999, Taglich Brothers and Weatherly Group have jointly pursued the sourcing and sponsoring of management buyouts of small private companies. The acquisition of Gulfstream and the Academy was their fourth such transaction. Thomas A. McFall, the Chairman of our board of directors, is an affiliate of Weatherly Group and Douglas E. Hailey, a director, is an affiliate of both Taglich Brothers and Weatherly Group.

I don’t know why, but I always prefer to see at least the pretense of arms-length between companies selling stock and their underwriters. It’s an affliction of mine, even though I know that the standard “arms-length” is typified by arms that would make a dwarf feel well-endowed.

So I was amused to see the name of the firm to which the company had assigned the underwriting role. Microcap or not, this one seems like a bit of a turd.

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