- 2 Minute Read
- 25th June 2008
Pacific Business Centers Announces Acquisition of American Executive Center
Palo Alto, CA – May 9, 2008 – Pacific Business Centers (PBC) the fast growing provider of on-demand offices and meeting space, announced today it is acquiring a substantial minority equity interest in American Executive Center (AEC) locations in Cupertino and Sunnyvale, California. Both locations will be re-branded as Pacific Business Centers and their operations and management structure merged into PBC’s.
“I have the highest respect for what PBC has achieved,” said Keith Warner, American Executive Center CEO. “Joining PBC will provide us with the resources and support necessary to upgrade our technology platform, enhance the value our clients receive, and extend our marketing reach.”
American Executive Center opened its first center more than 23 years ago in Cupertino and added the Sunnyvale location in 2004. The centers were owned by Keith Warner and his brother Jeff Warner, an active member of the Board of Directors of OBCAI, the international trade association of Office Business Center operators.
The transaction fits squarely into PBC’s “reverse roll-up” strategy aimed at partnering with top echelon operators who join PBC as Managing Partners. The regional Managing Partners bring their expertise and local market knowledge, while PBC provides economies of scale and funding to open new locations. Over time, the management processes and technology platforms of all centers will converge, setting the stage for a seamless integration. “Full ownership integration is also possible should PBC go public in the future” said Jeff Warner, AEC Executive Vice President, “but ultimately it’s up to the Managing Partners to control their destiny.”
Laurent Dhollande, PBC’s CEO, said, “The most exciting aspect of this announcement is our ability to expand the depth and breadth of our executive team with universally respected industry leaders like Keith and Jeff. Their energy and enthusiasm alone will turbo-charge our growth engine”.
PBC’s first experience with the Managing Partner concept is a year old, when Tracy Conway-Wilson, a long time successful owner-operator herself, joined PBC to grow the company’s portfolio in the Sacramento area. “We were doing fine on our own, but it became clear to me that I would probably not survive very long as an independent operator,” said Wilson. “One year later, I oversee two centers I co-own with PBC, and will have a third center in June. All centers are equipped with state-of-the art VoIP telephony. I have marketing and operating capabilities that were unthinkable when I owned just the one center, and, best of all, we are killing our competition.”
“Tracy’s addition to PBC has been a catalyst,” said Scott Chambers, PBC’s COO. “It is clear that economies of scale generated by a larger organization are becoming essential, but we could not fathom ourselves growing top-heavy and overhead-loaded. We are in the service business, where local presence, decentralized decision making, and entrepreneurial spirit are paramount. Tracy showed us that seemingly contradictory forces, like the need for economies of scale and aspirations for entrepreneurial freedom could be fully reconciled. Not only did she exceed everyone’s expectations, but she showed that the Managing Partner model was easy to implement because it fits our philosophy so well.”
PBC’s partner model is inspired from the organizational model present in many law firms and consulting firms where equity partners are co-owners of the company, contribute to the management of the overall infrastructure, but remain vested in the long-term success of their local portfolio because close proximity to the customer is critical to the entire organization’s success.