AAG float might not include Prion

AAG float might not include Prion

AAG's long-term plan to float is in the final stages of coming to fruition. All that remains, according to managing director Allan Brackin, is the arrival of the right market conditions and the resolution of where AAG-owned Prion will be come the group's public offering.

Prion's place, or lack of, in the public company is certainly top of AAG's agenda. "There are definitely alternatives when considering what will happen with Prion," explains Brackin. His preferred option is to sell Prion and "use the money we get for future expansion or as funds for the shareholders". This decision is presently dependent on troubled global distributor CHS "sorting out its problems", according to Brackin.

"We have had a few bites from CHS which would be good for Prion. As part of a global organisation it will be able to consolidate itself with a number of vendors.

"Also, CHS didn't want to change anything so Prion staff would retain their jobs and the strategy would remain essentially the same," claims Brackin.

According to Brackin, CHS' own workforce cuts and stock market and revenue woes have put any decisions on hold for at least the next three months, although AAG, Prion and CHS are still in negotiations and will continue to maintain relationships despite CHS' preoccupations.

"CHS is in recovery mode at the moment. But we are still very comfortable with CHS and I suggest we will eventually do a deal with them. But we will hold back for a three to six month period and see what happens with their consolidation."

In the meantime Brackin suggested Prion could "survive on its own in the short term", leaving the situation open to speculation that AAG's float is imminent despite the absence of a definite deal between CHS and Prion.

The alternative for Prion is to be included in the float, which obviously means that the group would bring in more revenue, an option Brackin believes will pacify "some investors who want to see higher revenue. The problem of course is that Prion as a distributor has lower margins than service providers which some investors don't like."

Despite Brackin's preference for CHS to acquire Prion, he is insistent that at this stage discussions are ongoing and that Prion is content to go both ways and would be welcomed as part of the public AAG group.

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