Our goals is to buy 8 to 10 fashion manufacturers (textile, clothing, footwear & fashion accessories) in the next 5 years and put them all under 1 umbrella called K1 Style Portfolio that will be managed by K1 Organization.
We will centralize the 10 businesses to minimize the cost of operations and refine the sales team to double the sales to increase the business valuation of the entire group collectively as you will see below:
The main weakness of the fashion manufacturers are 2 things: they do not have a strong sales team and they don’t invest in their machinery to upgrade and modernize them to expand the business.
These 2 weaknesses of the fashion manufacturers are our 2 strengths because we have a great sales team with track records and we have a sister company that builds industrial machinery for manufacturers and factories.
We will register K1 Style Portfolio in Italy to be an Italian company with an office in Milan or Florence which is the fashion capital of the country and Europe. Being an Italian company based in Italy is a big deal and influence in the fashion industry as Italians have a great reputation in the fashion world.
U.S. Deals
Using SBA 7(a) Loan to buy businesses
We buy American businesses using SBA 7(a) loan that is a government backed guarantee loan for acquisitions in the U.S. where we need to put down 20% equity (cash) at closing and we’ll get the 80% as SBA 7(a) loan to buy the business. This is the cheapest way to buy businesses in the U.S. market.
We have a group of SBA lenders that will lend us the 80% loan for our acquisitions. We also choose SBA qualified businesses which makes it easy and fast for us to close the deal.
SBA 7(a) loans are maximum $5 million with 25 years term at 4% to 8% interest rate. With maximum $5M SBA loan, we will need $1 million investment from our side on each deal to close the transaction.
So we will need a total of $10 million investment from you as our investor to buy 10 companies at $5 million valuation per each company to build a $50 million portfolio of 10 companies within the next 3 to 5 years.
After closing our first few deals, we can negotiate with our SBA lenders to give us 90% SBA loan after we build a history with them as a good client and this is a high possibility to get a better term sheet for our future SBA loans.
Europe Deals
Using 80/20 Loan to buy businesses
We buy European businesses using typical commercial loans where we need to put down 20% equity (cash) and we’ll get the 80% loan from the bank to buy the business.
The good thing about the European deals is that we can buy bigger companies at $10M or $20M valuation and we will still put down 20% cash to get the other 80% as a loan from the bank, this way we can buy a few bigger companies to reach the $50M portfolio.
What we want from you, the investor?
We’re seeking $10M to $20M investment (within 2 years) from you as our investor for 5 to 10 years (this is optional) as our 20% of total downpayment/equity to buy 10 to 20 companies to build a $50M to $100M portfolio of fashion manufacturers.
We do need you to stay with us for 5 years (as you saw in the table above) where we will complete our transactions to build our $50M to $100M portfolio, make the businesses more profitable and expand the businesses so we will all get the upside benefit which realistically takes 5 to 10 years time. We all know that great things take time, nothing happens overnight.
What is in it for you as our investor?
Your investment with us will give 3 levels of ROI in 3 stages of our business development as follows:
- ROI in Day 1
- ROI in 2028
- ROI in 2030
Here are the 3 ROI levels on your investment.
YOUR ROI IN DAY 1
Your $10M to $20M investment will help us to build a $50M to $100M portfolio by paying the initial 20% cash equity at closing in each deal.
What you will get for your 20% equity investment in our deals are the following benefits:
Let’s Say you invest $10M with us in 2025 .
Your $10M investment in 2025 to buy 20% equity in our $50M portfolio. You will get 25% equity which is extra 5% equity in day 1 and 25% of $50M portfolio is 25% ($50M) = $12.5M.
YOUR ROI IN 2028
In 2028 where we have a $50M portfolio of 8-10 companies under our group, the total valuation of our companies together as a group will double MINIMUM so our portfolio valuation in 2028 will be $100M+ and this is a conservative real projection.
YOUR ROI IN 2030
From 2028 to 2030 we’re focusing on growing each company’s valuation by 20% via more sales and upgrading their machinery if they need it so 20% grow in the $100M portfolio will give us a $120M portfolio by 2030.
Again, this is all conservative projections (not an optimistic projection).
And if you invest $20M and stay with us for 10 years then you will benefit the compound effect upside and exponential return which is more attractive.
Please note that you should stay with us till 2030 to execute our actions plan.
If you want to exit in 2030 or 2035 then we will have the exclusive buyout (buy-back) option to buy your 25% equity in the portfolio because we are young and long-term thinkers so we will stick around for long run. This is our true passion and we do want to build a big fashion empire by taking small steps in the beginning.
We will have exclusive buy-back option to buyout your 25% equity in 2030 or at any point after 2030 when you want to exit.
Each partner (including the investor) will get a fixed salary of $60,000 per year ONLY IF HE/SHE WILL WORK FULL-TIME in running and managing the portfolio.
If you will do this deal with us
Then you are a family to us and that’s how we value our relationships with our partners and close circle.
We’ll do anything for family, family always comes first but we need to be a family first and when that happens we will bring you short term trade deals in oil and gas as we are from Middle East and we have involvements in oil and gas trades with very high returns.
We are not here just for the money, we are here for the long-term relationships with honesty and integrity to build meaningful work with our partners, with people like us.
Thank you for your precious time and attention till this point and we look forward to working with you if you feel & think that this is a win-win deal.
