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COPYRIGHT 2001 The Miami Herald
Byline: James McNair
Mar. 18--Frank Sinatra died, Gary Sheffield was traded for Mike Piazza, and a Miami company called UniCapital Corp. went on a $500 million spending spree.
It was May 15, 1998, and UniCapital was buying its way to greatness. The company raised $532 million in its initial stock offering that day, then paid out all but $15 million to the owners of 12 companies, to lenders and to the underwriters of its IPO.
By most measures, UniCapital was flush and on its way to achieving its goal of becoming a leading player in the fast-growing leasing business. The 12 acquired companies brought in $581 million a year in revenue. UniCapital had a $1.2 billion credit line and could replenish its capital by selling its leases in the secondary market. Its parking lot was full of Mercedes-Benzes.
"UniCapital is in the equipment leasing business to stay," the company vowed on its Web site.
How wrong it was. In just 2-1/2 years, UniCapital was broke, broken up and barely breathing in U.S. Bankruptcy Court. It landed there after encountering a perfect storm of events: The death of consolidation or "rollup" stocks, a squeeze on fresh capital, a shakeout in the equipment leasing industry and a glut in the market for used aircraft and engines. All were magnified by crushing bank debt.
Last year, in a stunning admission that it had become a house of cards, UniCapital wrote off the remaining value of its acquired subsidiaries. Offices were closed, assets sold and all but a few dozen of its 750 employees of a year ago were laid off. Today, the Limoges china and Baccarat crystal gathering dust in the bayview office of UniCapital's deposed president, Robert New, symbolize all that's left.
In due course, UniCapital will be liquidated entirely and will then join the legion of hot-to-trot South Florida companies that turned out to be duds. Except that this one, according to Forbes magazine, was the biggest fiasco of all initial public offerings in the past decade.
"It was an unmitigated disaster," said Michael Vinciquerra, a Raymond James & Associates analyst who followed the company.
UniCapital was the brainchild of two men. New, 33 at the time, had cut his teeth as an acquisitions specialist for U.S. Office Products, a retail chain. The other, Jonathan Ledecky of Washington,...
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