San Francisco—based independent publisher Berrett-Koehler Group is looking to raise $1 million by getting its customers and other people associated with the business to invest in the company through a Direct Public Offering.
"It's been done before, but by very few publishing companies," said B-K president Steven Piersanti. "We wanted to have our affinity groups, especially our customers, be owners of the company," he said, explaining why B-K chose to limit the stock offering instead of opening it up to all investors. "It fits with us as a company."
B-K, which plans to use the money to expand its publishing program, increase marketing efforts and pay down debt, has issued the DPO in seven states, selling shares of the company priced at $8, with a minimum investment of 100 shares. So far the company has raised $250,000.
Unlike an Initial Public Offering, a DPO is not monitored by the Securities and Exchange Commission, but by the securities commissions of the states in which it is offered. Beginning in December 2004, B-K began offering shares in California, Illinois, Indiana, Minnesota, New Mexico, New York, Wisconsin and the District of Columbia. The stock offering will run through 2005.
B-K's sales rose 25% last year, to $6.6 million. The company focuses on titles that challenge dominant institutions and power structures, and it had its bestselling book ever last year with Confessions of an Economic Hit Manby John Perkins, which landed on many bestseller lists.
B-K expects the funds to enable it to increase its output from 30 titles a year to 40. The company does not plan to pay dividends on the stock, but will buy back stock on a year-by-year basis and create an Internet site to match buyers and sellers.
"We're way ahead of our plans when we set up the DPO," Piersanti said. The company expects to raise the stock price in a few months, he added, but the stock will not appear on any stock exchanges. "We weren't trying to become a creature of Wall Street," said Piersanti, "where we are forever beholden to what analysts think of our last quarter."
