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AIM Direct, Inc.

Acquisition Date:

Divestiture Date:

Held in Portfolio:

Purchase Price:

Sales Price:

% Gain:

Annualized R.O.R.:

Industry:

S.I.C. Codes:

May 9, 1996

June 30, 1997

13 months

US$ 250,000*

US$   60,000*

<76.0%>*

<71.3%>*

Direct Mail Advertising Services

7331

Portfolio Analysis & Discussion

Referral   

  The acquisition of Automotive Income Management, Inc. (and its affiliate Western Automotive Acceptance Corp.- see analysis) came about as a result of InAmerica’s then newly elected president’s recommendation for acquisition.  Having served as Automotive Income’s attorney for a number of years, and having intimate knowledge of the owners‘ dispute as to withdrawals of capital. 

  After an analysis of the company, an offer was made to the owners which outlined their compensation, restrictions and responsibilities as employees of InAmerica. In imposition of management controls had a dramatic effect on the profitability and cash flow of the entity.

our expectations which would have placed the entity in a position to be spun off or sold in the next calendar year.  However, a mass defection of the sales department created a crisis.  An investigation determined that the previous owner, while acting as an officer of InAmerica, had formed a new similarly named company, and had offered the sales staff cash bonuses to resign and work for the new secret company.  By breaching his employment agreement, and the fraudulent acts, AIM Direct went from cash rich to cash starved in the short term.  The restoration of the company would have required lawsuits against the owner and the newly resigned sales staff.

    As an alternative, the new InAmerica president joined with the V.P. of Operations to make an offer to acquire AIM Direct.  Seeing a conflict that would not have resolved itself if we had kept AIM Direct, the decision was made to accept the minimal offer.  In the end, AIM Direct was sold to Target Marketing, Inc.

    While the loss does not reflect gains that came from unrestricted cash flow during its time as a portfolio company, the loss of a successful turnaround is not an easy pill to swallow.  There is no crystal ball that will foretell who will be driven greed to commit fraud.

Top Formula For New Car Sales

    The algorithms and formulas utilized by AIM Direct’s computers was the most successful in the industry to lure prospective car buyers to a dealership within certain distance parameters.  So powerful were the new and used car sales resulting from AIM Direct mailings, the company was able to book new customers at the National Automobile Dealers Association Convention.  AIM Direct’s booth exhibit proves highly successful as a result of its emphasis on two particular themes.  We invite you to view the video that was constantly playing with the performer available to visit with the convention participants.

The Power of Greed

     The financial improvements far exceeded

AIM Direct video played at the NADA Convention.