Written by Bob Meyer, Editor of BarterNews

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The BarterNews staff is attending the International Reciprocal Trade Association’s 26th Annual Convention in Orlando, Florida. We expect to report some interesting and exciting news from the convention in subsequent reports.

Dealmakers Back In Business Using Stock As Currency

Following a multiyear downturn in the number of mergers and acquisitions, companies are again in the shopping mood. Already this year companies have announced $707 billion in mergers and acquisitions, according to Richard Peterson, senior researcher at Thomson Financial.

That’s 30% more deals than during the same period last year, and the highest since the M&A heyday in 2000. It’s the fourth-strongest pace of mergers and acquisitions in history. The biggest influence on M&A activity is the health of the stock market, largely because companies want to use their currency (stock) to buy other companies.

In the late 1980s under Drexel Burham and Michael Milken, some $400 billion of mergers were finalized annually, and a full 90% of them were concluded through the issuance of high interest Junk Bonds. Only 10% were done on a non-cash basis. Interestingly, 50% of today’s offers (“I’ll give you part of my company for your company”) are done on a non-cash basis.

Trade Exchange Owners...

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Kaliel Taking Annual Baseball Trip To “The Field of Dreams”

Three weeks ago we introduced you to a unique character, one of the top trade exchange salesmen in the industry, 55-year-old San Diegoan Art Kaliel. He refers to himself as “George Costanza” for obvious physical similarities.

Kaliel publishes a semi-weekly little newsletter titled “The Green Standard,” sharing some quips and thoughts as well as names of various companies that he serves.

This week he was busy sending out post cards from Dyersville (IA), the movie site and home of Universal Studios’ 1989 movie Field of Dreams, starring Kevin Costner.

He makes an annual pilgrimage to this part of the country from San Diego every year...then on to Chicago’s Comisky Park, the Skydome in Toronto, down to PNC Park in Pittsburgh and then over to the Big Apple. It’s quite a road trip that extends from August 31 to September 5. Along the way he’s smelling the roses, eating hot-dogs, and spending his trade dollars at every opportunity!

In his newsletter, Kaliel says the top 10 barter “wants” in Southern California are:

1. Advertising
2. Restaurant meals
3. Dentists
4. Marketing
5. Catering
6. Maid services
7. Clothing
8. Tools
9. Printing
10. Auto repair

If you wish to receive his Green Standard e-mail missives, e-mail him at rthurkaliel@hotmail.com. And remember, as he says, “Any reproductions without written permission are OK by George!”

You also may want to check out his web site: www.thegreenstandard.com.

Now available ...BarterNews issue #64, get your copy now! Orders will be shipped within two business days of publication. Click on Order Form.

(If you are not sure if your subscription has lapsed, e-mail your name, address, and zip code to bmeyer@barternews.com.

Phoenix Billboard Company Prepares For Public Offering

In 1997, Karl Eller sold his outdoor advertising company to Clear Channel Communications for $1.15 billion. The deal came just weeks before he planned to take Eller Media Corp. public in a $220 million IPO (initial public offering).

Today, the company that’s now known as Clear Channel Outdoor is preparing for another initial public offering as its parent company, Clear Channel Communications, works to restructure operations to raise capital and improve shareholder value.

Based in Phoenix, Clear Channel Outdoor has grown to operate more than 150,000 ad displays in 42 U.S. markets, plus South America, Mexico and Canada. The company also operates about 50% of the signage in New York City’s Times Square.

San Antonio-based Clear Channel, the country’s No. 1 radio station owner, announced this month it would conduct a public offering for 10 percent of the Clear Channel Outdoor’s stock. The company also plans to spin off its live entertainment subsidiary.

After the IPO, Clear Channel Outdoor’s global headquarters will be in San Antonio, not Phoenix. Mark Mays, Clear Channel Communication’s chief executive, is expected to be CEO of the Clear Channel Outdoor public entity.

Eller retired as Clear Channel Outdoor’s CEO in late 2001. He now runs his own consulting business in Phoenix called The Eller Company.

Eller said Clear Channel’s plans to offer the IPO aren’t surprising given the sector’s strength. He noted that the only other “pure” outdoor firm, Lamar Advertising Co. of Baton Rouge (LA), is successful as a public company. Lamar’s current price-earnings ratio (company’s current share price compared to its per-share earnings) is a robust 143!

The 10 percent offering of Clear Channel Outdoor, expected to be completed by the end of 2006, is expected to raise $350 million. It will trade on the NYSE under ticker symbol CCO.

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.

From the past. . .
BarterNews issue #43

Barter Investors Trade Company’s Products & Services For Equity In Promising Ventures

By Gerald Benjamin

It’s the age old question. Do you need the money, or do you need what you’re going to use the money to buy?

As the barter marketplace expands and the sophisticated use of this versatile tool grows, we’re seeing a growing number of barter investors around the country.

A barter investor is defined as a company or an individual who is willing and able to make a needed and important investment in an early-stage idea on up to an established business.

Participation by such an investor quickly fills holes and provides one with a running start. In the majority of cases the investment isn’t a passive one, but rather sees an active investor bringing a contribution that is important—enabling a leverage using the barter investor’s already established infrastructure.

Depending upon an investor’s niche and expertise, this contribution could include introducing one’s clients to thousands of the barter investor’s customers or providing the advertising to gain new customers as well as other marketing expertise.

Additional contributions might be offering billing and collecting services, processing of orders, warehousing, shipping, and other services like negotiating bank lines of credits.

The Barter Investor’s Profile Looks Like This:

• Provides what you would have used capital to buy in exchange for equity
• Participative...not passive
• Early-stage preference
• Offers capital and infrastructure (an incubator model)
• Management most important criterion
• Venture must have capability to grow to $10 million in 3 to 5 years
• Invests up to $250,000 of products and/or services in exchange for equity

Three Examples Of Barter Investments:

A) The barter investor was an operating service company with a substantial unused line-of-credit. An investor guaranteed the line-of-credit for use by the entrepreneur at a predetermined price for stock. As the credit was used, equity ownership accrued for the barter investor. The investor became a member of this startup’s board of directors.

B) The barter investor, a computer manufacturing company principal, made available $50,000 worth of hardware, software, networking technology and system maintenance services, in exchange for a $50,000 equivalent equity position in the company.

C) The barter investor, a service company’s principal, committed the company’s staff and administrative infrastructure to handle all the customer service, payroll, A/R & A/P, as well as all order fulfillment and inventory control for a rapidly growing CD-ROM duplicator. The barter investor also functioned in an interim capacity as a CFO until one was hired.

In these examples we see that the entrepreneurs offered equity to vendors who became barter investors by trading their support services and infrastructure for equity in the firms.

(Mr. Benjamin co-authored the book Finding Your Wings: How To Locate Private Investors To Fund Your Venture.)

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.

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(For information on placing your company’s classified ad in the Tuesday Report, see Classified Advertising.)

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Here & There...

• A new Global Chamber of Commerce has entered into the web business to promote world peace. Founded and sponsored by Cultural Creatives, the Chamber’s stated mission is to create peaceful consciousness by maintaining a global membership of professionals who support peaceful enlightenment networking. For more information go to www.culturalcreativesglobalchamberofcommerce.com.

• Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!

• Barry Diller, head of IAC/InterActiveCorp which recently spun off its Expedia online-travel business, is moving into the real-estate brokerage business. Realtors are concerned that Diller could become a major rival.

  Services like Expedia have hammered local travel agents, and the concern is that online real-estate operators could eat into the revenue of local realtors. IAC is already active in residential real estate through its LendingTree.com and RealEstate.com sites, which offer to find an agent for buyers or sellers. The firm earns about 30% on these deals and they share the money with the consumer, often in the form of a Home Depot or American Express gift card.

• Most people have one technology tool they can’t live without; for financial executives, it’s the cell phone. In a nationwide survey of CFOs cell phones topped the list, with 44% of the response, as the most indispensable portable technology device. Laptop computers came in a close second, cited by 39% of executives polled.

• The Bay Area Transit Board has adopted a plan to offer “BART Rewards” or credits to riders of the transit system.

• Females consume over 60% of all wine in the U.S. and purchase nearly 80% of the wine sold...yet the wine industry has largely ignored them, according to Tracey Mason, Beringer Blass Wine Estates’ director of innovation.