Redux Holdings, Inc. (Quote: RDXH) is a stock that is not really on anyone's radar at the present time. In a nutshell, Redux goes out and acquires distressed companies and/or cherry picks assets from distressed companies that private equity firms, hedge funds, mutual funds, venture capitalists, etc. would like to get rid of. The management team at Redux is an experienced group of industry veterans comprised of members of Enterprise Solutions Group (http://www.eginc.net) and others. The team is experienced in M&A plays of financially or operationally distressed companies and has handled companies ranging from millions to billions.
Just a heads up: An interesting article about Redux Holdings is currently on the front page of the current Los Angeles Business Journal titled: Company Spinning Turnaround Process.
In 2005, Adam Michelin, Redux's CEO, asked me if I would be interested in assisting him in building a publicly traded M&A firm that would focus on turnaround scenarios in leveraged transactions. I told him that I might, it would just depend on the deal. After doing a little more due diligence on Adam, I realized that he was a well established, well connected and well respected player in the distressed company turnaround industry. I agreed to move forward on the project and Redux Holdings was the result of these joint efforts.
For those who are wondering what the name Redux means, according to a Latin translation (freely available on the internet): Redux - ducis adj.: act. [bringing back , restoring]; pass. [brought back, returned].
My definition: “Rebirth”: ie: rebirth of an asset; taking an asset that was mismanaged or which failed for a specific reason and isolating and repairing the deficiency while returning the asset to its full potential value.
The root name is a proper description of what the company does with selected “orphaned assets” and distressed corporations. Redux identifies the valuable assets that are part of a poorly run operation, strips them out and isolates them in a new entity, brings in the necessary management and capital to fix any outstanding issues and returns the asset to profitability.
The primary objective for Redux Holdings is to identify potentially beneficial assets, acquire them at deeply discounted prices, and quickly restore them to profitable operations. The firm focuses on primary areas in which it intends to maintain a long term presence, called Permanent Core Groups. Currently, the core groups consist of:
1.) Consumer Services
2.) Nutrition and Supplements
3.) Technology
I won't go into great detail on my blog since I have an Investor Fact Sheet available on my website that can be downloaded free of charge. The fact sheet gives a much more in-depth overview of the pieces that are currently in the Redux portfolio. I am presently working on updating this for the Company, but this somewhat dated version still provides a pretty accurate picture and gives a good overall review.
I am currently discussing Redux with a number of accredited investors on my private equity side and I believe that Redux is on the right track. Redux bought the majority ownership of Naturade (Quote: NRDCQ) in August 2006. (Not sure why they have not dropped the “Q”, but getting that resolved is in process.) Anyway, Naturade had been cash flow negative for 5 years prior to Redux taking control. In November 2007, Naturade came out of bankruptcy and was recently put back on the OTCBB (See January 18, 2008: 8k filing). Although I am not sure of the method that will be used to implement a filing, I expect that Redux will become OTCBB in the near future as well.
DISCLOSURE: I helped this company to become public, I own stock in the company and I am a compensated consultant to the company for IR and Capital Markets Advisory.
Additional note: The float on this company is very small, I own a bunch of shares and there is not much stock available for trading. When it does start trading, I expect it will be tough to find stock to buy, but that is okay with me, since I already own my shares. :)
