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Thread: Empire and CLS merge

  1. #1
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    I just hope Empire does not adopt CLS's affiliate payment polices.
    And at least in LA Empire has already moved it's operations into the CLS lot at LAX

    Limousine Industry Leaders Empire International, Ltd. and CLS Worldwide Services, LLC to Form Nation's Second-Largest Chauffeured Transportation Company
    NORWOOD, NJ and LOS ANGELES, CA -- (MARKET WIRE) -- 02/28/2005 -- Limousine industry leaders Empire International Ltd. and CLS Worldwide Services, LLC, announced today the establishment of GTS Holdings, Inc., a holding company that will combine the assets of the two companies, forming the second-largest chauffeured transportation company in the nation. The announcement was made by David Seelinger, President and CEO of Empire International, Ltd., and Leon Reitzenstein, President of CLS Worldwide Services, LLC. Details of the transactions were not disclosed.

    Empire International and CLS Worldwide will continue to market their own independent brands, but will utilize and share the operational efficiencies of both companies. The combined organization will operate as GTS Holdings, Inc., and will be based in Norwood, NJ. Mr. Seelinger, currently President and Chief Executive Officer of Empire, will serve as CEO and Chairman of GTS. Mr. Reitzenstein, President and Chief Operating Officer of CLS, will continue in the same role for GTS.

    Empire International, based in Norwood, NJ, is one of the industry's leading companies, serving the travel needs of major corporations, both domestically and internationally, through one of the largest worldwide affiliate networks. Empire's Global Network Partners enable Empire to provide quality service in over 550 cities around the world. CLS, based in Los Angeles, is widely recognized as the preeminent provider of chauffeured transportation for the private aviation industry and 5-Star hotel properties worldwide. Through the integration of existing resources combined with the network of company-owned offices, GTS will be uniquely qualified to provide a superior level of chauffeured transportation services throughout the United States and will significantly broaden the company's global capabilities.

    "We are truly excited about this historic event for both of our companies," said Mr. Seelinger, the majority stockholder and Chairman of the new company. Mr. Seelinger began his career with Empire in 1981 and has received numerous industry and personal awards during his 24-year tenure. "To my knowledge, this is the most significant transaction that the industry has ever witnessed. We are harnessing the power of two of the industry's most trusted brands, which will enable us to provide an unprecedented level of service and geographical coverage to our customers."

    Mr. Reitzenstein, President of GTS Holdings, said, "We look forward to offering the services and resources of our two organizations and leveraging each of our strengths in providing first-class chauffeured transportation services. Bringing together two companies that share a common commitment to the delivery of impeccable service provides an opportunity to create an even stronger company -- the likes of which the industry has never seen."

    Empire International, Ltd. (www.empire-int.com), headquartered in Norwood, NJ, has the fifth-largest fleet of vehicles in the industry according to Limousine and Chauffeured Transportation Magazine (July 2004). CLS Worldwide Services, LLC, (www.clslimo.com), headquartered in Los Angeles, has the fourth-largest fleet of vehicles (Limousine and Chauffeured Transportation -- July 2004). The combined fleet of both companies ranks second in the industry. Empire International, Ltd. currently has company-owned offices in New York, NY; Norwood, NJ; Atlanta, GA; Los Angeles, CA; San Francisco, CA; and a regional sales office in Dallas, Texas. CLS Worldwide Services has company-owned offices in Los Angeles, New York City, San Francisco, and Aspen, CO, and a service center in Columbus, Ohio.

  2. #2
    Senior Member Limo Padawan
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    That's big. Any guesses what combined annual revenue might be?
    Matt Harrison
    AAA Guaranteed On-Time Limousine, Clinton NJ

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    Put your pinky up to your mouth and say in a Mike Myers voice ... "One hundred gazillion billion dollars!"
    The Redondo Beach School of Numbers
    A graduate with full honors ...

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    Senior Member JHJ's Avatar
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    Matt - go to LCT's Top 75 issue, write down the number of vehicles operated by each company, add them together, multiply by your favorite figure, say $75,000 per vehicle, and then divide by 14 to compensate for LCT's inability to count, and you should get a number that is in the ballpark. It's going to be interesting to see whether these combined entities have the wherewithal to consolidate their operations. Seelinger has never been a stretch limousine person, and CLS, well, what can I say. I heard that this is something of a shotgun wedding - that the trust which controlled Empire wanted out (that has been common knowledge since 9/11) and struck a deal to sell. Seelinger, being the minority shareholder, had no choice. I also heard that there is one or more lawsuits between Seelinger and the trust. Anybody know any more about any of this? The $64 question - who is REALLY in charge of the surviving entity? Where is Ron Sorci now that we really neede him?
    Originally posted by AAA/GOT:
    That's big. Any guesses what combined annual revenue might be?
    James H. Joseph
    Joseph Law Offices, P.C.
    Pittsburgh, Pennsylvania
    jhjoseph@joseph.law.pro

  5. #5
    Senior Member Limo Padawan
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    Originally posted by JHJ:
    Matt - go to LCT's Top 75 issue, write down the number of vehicles operated by each company, add them together, multiply by your favorite figure, say $75,000 per vehicle, and then divide by 14 to compensate for LCT's inability to count, and you should get a number that is in the ballpark. It's going to be interesting to see whether these combined entities have the wherewithal to consolidate their operations. Seelinger has never been a stretch limousine person, and CLS, well, what can I say. I heard that this is something of a shotgun wedding - that the trust which controlled Empire wanted out (that has been common knowledge since 9/11) and struck a deal to sell. Seelinger, being the minority shareholder, had no choice. I also heard that there is one or more lawsuits between Seelinger and the trust. Anybody know any more about any of this? The $64 question - who is REALLY in charge of the surviving entity? Where is Ron Sorci now that we really neede him?
    <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by AAA/GOT:
    That's big. Any guesses what combined annual revenue might be?
    </div></BLOCKQUOTE>


    Followed your formula and I'll be damned; Michael was right on the money!

    You always hear stories about the big guy up the street, Seelinger being one of many for me. No one has ever said he was stupid, at least not to me. I can't see anyone else running Empire. David is the energy that holds it together.

    By the way, to my knowledge, Sorci didn't consolidate companie; he bought them.
    Matt Harrison
    AAA Guaranteed On-Time Limousine, Clinton NJ

  6. #6
    Senior Member JHJ's Avatar
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    I heard from David today after my post. Here's what he says. As many of you know, David's original partner in the predecessor to Empire was killed in a motorcycle accident. His interest in the company went into a trust for his heirs. Prior to the CLS deal, David filed a lawsuit against the trust claiming that the trust engaged in activities which were operessive to his interests as a shareholder. It is unclear how that suit terminated, but David bought out the trust's interest in Empire. Thereupon, he did the deal with CLS using private capital. The private capital investors have the minority interest in the new company, and David has the majority. This came from David directly and I have no reason to doubt his description of the events. It is nice to know that David still keeps up with the posts here, even if he doesn't contribute, which is a shame, because he has a lot to offer.

    Originally posted by AAA/GOT:
    <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by JHJ:
    Matt - go to LCT's Top 75 issue, write down the number of vehicles operated by each company, add them together, multiply by your favorite figure, say $75,000 per vehicle, and then divide by 14 to compensate for LCT's inability to count, and you should get a number that is in the ballpark. It's going to be interesting to see whether these combined entities have the wherewithal to consolidate their operations. Seelinger has never been a stretch limousine person, and CLS, well, what can I say. I heard that this is something of a shotgun wedding - that the trust which controlled Empire wanted out (that has been common knowledge since 9/11) and struck a deal to sell. Seelinger, being the minority shareholder, had no choice. I also heard that there is one or more lawsuits between Seelinger and the trust. Anybody know any more about any of this? The $64 question - who is REALLY in charge of the surviving entity? Where is Ron Sorci now that we really neede him?
    <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by AAA/GOT:
    That's big. Any guesses what combined annual revenue might be?
    </div></BLOCKQUOTE>


    Followed your formula and I'll be damned; Michael was right on the money!

    You always hear stories about the big guy up the street, Seelinger being one of many for me. No one has ever said he was stupid, at least not to me. I can't see anyone else running Empire. David is the energy that holds it together.

    By the way, to my knowledge, Sorci didn't consolidate companie; he bought them. </div></BLOCKQUOTE>
    James H. Joseph
    Joseph Law Offices, P.C.
    Pittsburgh, Pennsylvania
    jhjoseph@joseph.law.pro

  7. #7
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    LA Times version of the story thanks to Howard L. Harrisons Newsletter

    LIMO RIVALS MERGE

    LA Times * March 1, 2005

    HOLLYWOOD, CA -- Before Sunday's Academy Awards ceremony, Norwood,
    N.J. based limousine company Empire International was in tough
    competition with CLS Worldwide Services of Los Angeles.

    But as the two quietly teamed to chauffeur celebrities to Hollywood's
    biggest annual gathering, the companies were putting the finishing
    touches on a merger. On Monday, they announced a deal to create the
    nation's second largest fleet of chauffeured transportation services.

    "Out of all the operators of this size, there's never been a union
    like this, with two fierce competitors coming together," said
    DavidSeelinger, president and CEO of Empire, which opened in 1980.
    "Both
    companies had an enormous number of vehicles at the Oscars, and it was
    just nice to see us come together as a family to make sure those
    customers got the best of everything."

    The combined company will be called GTS Holdings Inc., and will be
    headquartered in Norwood, N.J. Terms of the deal were not disclosed.
    But Seelinger said the combined annual revenues of the partners are
    more than $110 million in an industry that's worth more than $6
    billion in the United States.

    The largest fleet is held by Carey Limousine USA Inc. in Washington,
    D.C., he said.

    Empire's core business is driving corporate and entertainment-industry
    customers in its fleet of more than 350 luxury vehicles, including
    Lincoln Town Cars, BMWs and a Rolls Royce Phantom (which costs about
    $750 an hour). CLS, with its fleet of more than 300 luxury vehicles,
    primarily services three markets: private aviation, the entertainment
    industry and five-star hotels.

    "Because of our size and specialties, this made sense,'' said
    Seelinger, who will be chairman and CEO of the new company. He said
    the two companies, for now, will operate under their current brand
    names, but will eventually combine some back-office operations such as
    billing. Also, he noted that Empire's software capabilities will
    benefit CLS.

    CLS Worldwide President Leon Reitzenstein (who will retain that title
    at GTS), said in a statement: "We look forward to offering the
    services and resources of our two organizations and leveraging each of
    our strengths in providing first-class chauffeured transportation
    services.''

    GTS now has more than 800 employees, and serves customers in more than
    600 cities across the globe. The company farms out some of its work to
    smaller businesses.

    "Our current plan doesn't call for any removal of employees at this
    time,'' said Seelinger, whose business also operates Secure Car
    Worldwide, a ballistic protection vehicle company for "high net worth
    individuals who need that type of protection.''

    In fact, Seelinger, who was twice named "Operator of the Year" by LCT
    magazine, said the merger will probably benefit smaller operators.
    "There's more business for them as we grow our business,'' he said.

    Neil Weiss, the Associate Publisher, Eastern Region, of LCT magazine,
    agrees. "David Seelinger is a leader of the industry and he'll
    continue to run a strong company,'' Weiss said. "As he expands into
    new cities, he'll inevitably pick up more affiliates and feed them
    work through his network.'

  8. #8

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    Originally posted by Viperion Corporation / Limos.com:
    Put your pinky up to your mouth and say in a Mike Myers voice ... "One hundred gazillion billion dollars!"
    who needs a billion when you can have a meelion dollars?

  9. #9
    Super Moderator Limo Scene's Avatar
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    In a MAJOR "OOPS", it seems that the new holding company forgot to get a license from PUC to operate in California. While they were busy touting their big merger, PUC was reading the press releases as well and yesterday, CLS found themselves locked out of LAX, one of the busiest airports in the World and a major source of ride originations for CLS. Bummer! I hate when I dive off the board and forget to make sure there is water in the pool!
    Jim A. Luff
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    Limousine Scene - An Award Winning Company Since 1990
    Bakersfield, CA
    Limousines, Sedans, Vans, Charter Buses, Limo-Buses, Wheelchair Vans www.limousinescene.com

  10. #10
    Senior Member JHJ's Avatar
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    That may not last long, Jim. The issue is, who knows less about corporation law, the California PUC or Seelinger. There are two posted sources of information about this deal - one being the Market Wire regurgitation of a press release, and the other being an LA Times article.

    If you can believe the LA Times article (and usually you cannot), they say that the two corporations "merged" and the resulting company is called GTS Holdings. What that means legally is that one of the two companies is the survivor in a merger and it has been renamed. I'm assuming, of course, that whoever wrote the article knew what he/she was talking about. If the article is accurate, then the question becomes whether the surviving company had a California PUC. If it was a true merger, then the non-surviving company's assets inure to the benefit of the surviving company, which would include its PUC authority. I suspect that if the article is an accurate statement of the "merger," that the mistake made was not to forget to fill the pool, but to not let California's PUC officially know of the merger and name change. In that case, I suspect that the non-compliance is less severe than one might think and that the company will be up and running pretty quickly - probably today.

    The Market Wire press release, however, is a whole different story. It says that a new holding company has been formed which will combined the assets of the two companies. It's anybody's guess what that ridiculous statement means. Generally, calling something a holding company means that it is not an operating company but exists to "hold" the stock of other companies, in which case both combining companies still exist and presumably still operate under their own pre-existing authority. But when you talk about "combining the assets" of the two companies, that can be done any number of ways and the press release does not use terms of art. Now, if it was not a merger and some new operating entity has been created, then the situation is a little more dicey. The press release refers to GTS Holdings as a "new" company, which is inconsistent with the LA Times article saying this was a "merger," which also suggests that whoever wrote the press release or the article, indeed, didn't know what he/she was talking about.

    I was in Norwood when David was acquiring his way into Atlanta and he was very familiar with the technoques to get around the regulatory problems and the effect of various forms of acuisition, so I don't think that kind of an OOOPPPs occurred. My guess is that both companies still operate as subsidiaries of the holding company, that this was not a merger in a classic legal sense as the LA Times reported, and that the mistake made, if any, was not reporting to the PUC the change of ownership of each of the subsidiaries, which is pretty much a technical violation which will get you fined but not shut down. In any event, I'm not sure that it's any big WHOOPS!

    Originally posted by Limo Scene:
    In a MAJOR "OOPS", it seems that the new holding company forgot to get a license from PUC to operate in California. While they were busy touting their big merger, PUC was reading the press releases as well and yesterday, CLS found themselves locked out of LAX, one of the busiest airports in the World and a major source of ride originations for CLS. Bummer! I hate when I dive off the board and forget to make sure there is water in the pool!
    James H. Joseph
    Joseph Law Offices, P.C.
    Pittsburgh, Pennsylvania
    jhjoseph@joseph.law.pro

  11. #11
    Super Moderator Limo Scene's Avatar
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    I attended a CLS Affiliate meeting while in Vegas which was conducted by David. He explained that Charlie Horkey was gone from CLS as it was known but that Charlie would continue to operate CLS Las Vegas under that specific name. As Charlie was the principal of CLS from it's original PUC filing/licensing, there had to be in fact an ownership change. I believe in California that would require the new "owner" to obtain their own license. The new "owner" would be/is GTS who apparently thought they would grandfather the license. Just my take on it anyway. It is also my understanding from the meeting that both companies will operate under their own name but will share "resources" such as a dispatch center. When orders are farmed out, dispatch will advise the farm company which sign to display. Payments will be issued from GTS in 30 DAYS from the date of service and the goal is to go to 15 Days! We were asked to resume billing CLS as credit cards will no longer be used to secure farm companies.
    Jim A. Luff
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    Limousine Scene - An Award Winning Company Since 1990
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  12. #12
    Senior Member JHJ's Avatar
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    A change in the shareholder of a corporate certificated motor carrier should not, in most states, require a new certificate. The old certificate stays in place and you merely apply to the PUC to approve a change of ownership. Because PUC procedures in most states have not caught up with modern corporate transactions, the change in shareholders is usually approved after the fact with no consequence. If your information is correct, then what I suspected is true, that both companies continue to operate as usual the only difference being that they are now owned by GTS Holdings, and GTS may merely hold the stock, or it may become a management company that assesses each subsidiary an amount of money to pay for common corporate staff and activities. I've set these things up in a variety of different ways, but this is the obvious way to avoid regulatory problems. Eventually they'll meld the operations together. If I were doing it, as I added new cars I'd acquirfe them is a totally separate corporation and lease them to the operating company until eventually, as all existing cars are disposed of, the two operating companies (CLS and Empire) would own no cars Then over time I'd start eliminating two companies operating side by side as I was sure each had appropriate regulatory authority. Then, having eliminated duplications in market areas, I'd start proceedings to transfer operating authority in those states where one company has it and not another, until I ended up with one company holding all operating authority, permits, etc. Then, depending upon if one or the other companies had any NOLs (net oeprating losses), I'd merge the company with the NOL into the other to take advantage of the tax loss and shelter income in the company that is making money. Eventually, I'd collapse the holding company and end up with one corporation operating nationwide.
    Originally posted by Limo Scene:
    I attended a CLS Affiliate meeting while in Vegas which was conducted by David. He explained that Charlie Horkey was gone from CLS as it was known but that Charlie would continue to operate CLS Las Vegas under that specific name. As Charlie was the principal of CLS from it's original PUC filing/licensing, there had to be in fact an ownership change. I believe in California that would require the new "owner" to obtain their own license. The new "owner" would be/is GTS who apparently thought they would grandfather the license. Just my take on it anyway. It is also my understanding from the meeting that both companies will operate under their own name but will share "resources" such as a dispatch center. When orders are farmed out, dispatch will advise the farm company which sign to display. Payments will be issued from GTS in 30 DAYS from the date of service and the goal is to go to 15 Days! We were asked to resume billing CLS as credit cards will no longer be used to secure farm companies.
    James H. Joseph
    Joseph Law Offices, P.C.
    Pittsburgh, Pennsylvania
    jhjoseph@joseph.law.pro

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