As we went to press, OnX shareholders were voting on a proposal to sell the publicly-traded company’s VAR business to CEO Sheldon Pollack and president Phil DeLeon for $6.8 million.
It’s the break-up of a company founded in 1989 and has grown to revenues of $61 million this year. Growth, however, is flat; held back, Pollack says, by tight margins on hardware sales, but slumping share prices demanded action.
Pollack and DeLeon will run (and be the largest shareholders in) the yet-to-be named Web hosting side of the business, while they’ll merely be owners of privately-held OnX, which will be run by Ed Vos formerly of Metafore.
It’s another reminder that for solution providers going public is a brave strategy.
Of course, Pollack chose to do it in 2000, when tech was booming.
“The timing wasn’t impeccable,” he says today, “but the concept was right. Organizations go public to raise money, and although we did not need the money at the time, after the dot-com meltdown it did come in handy.”
The market likes technology companies to be high margin, high growth entities. Aside from CGI, few resellers are.
Lesson learned, everybody?
