Brian Schaeffer, president and founder of Texas Advertising Inc., announced late today (Nov. 26) that his company has suspended acquisition talks with Southeast Publications Inc.
His news release follows:
When Texas Advertising Inc. (TXAD) purchased AGS, formerly Affinity Guest Services LLC in June 2011, one of the first congratulatory calls received by TXAD CEO Brian Schaeffer was from Southeast Publications owner Wally Warrick. During that call Warrick asked Schaeffer, “Hey, why don’t you buy me out too?” Schaeffer initially declined but left the door open for further discussions based on the assimilation of the AGS purchase.
Meanwhile, AGS has ramped up its marketing efforts. In just the last few months, dozens of parks have chosen TXAD over its competitors to handle their advertising, printing and website needs. The success of TXAD has not gone unnoticed by its rival, Southeast Publications USA Inc. (Southeast) and its owner, Mr. Wally Warrick.
Rather than compete in the traditional sense, Southeast has resorted to the courts to thwart TXAD’s ongoing success. Recently, filing suit in Florida federal court against TXAD and its owner, Mr. Brian Schaeffer, alleging unfair business practices. TXAD maintains that the lawsuit has no merit and was improperly filed in Florida, where Southeast is headquartered. Before TXAD and Mr. Schaeffer were required to respond to the lawsuit, United States District Judge William J. Zloch dismissed the entire lawsuit because of Southeast’s failure to explain why Mr. Schaeffer, a Texas resident, should have to defend himself in a Florida court. Southeast quickly asked the court to reinstate the lawsuit, but again, Judge Zloch upheld his prior dismissal of the lawsuit.
TXAD was encouraged by the dismissal because, all the while, TXAD and Southeast were in discussions about a possible purchase of Southeast’s advertising business. At the time, an “as is” purchase of Southeast’s accounts was contemplated, which is how TXAD acquired AGS in 2011. TXAD argued that the dismissal was an opportunity for both companies to continue talks without wasting time and money fighting a lawsuit. Rather than returning to the bargaining table, Southeast returned to court. However, this time Southeast sought to avoid the ire of Judge Zloch and instead filed the identical lawsuit in Florida state court. Because Southeast continues to choose wasteful litigation, TXAD withdrew from any further discussions about a possible deal.
In true David versus Goliath fashion, TXAD has been forced to defend itself against its much larger competitor. In preparing its defense, however, TXAD has discovered what it believes are unfair business practices by Southeast. A number of individuals have come forward to offer insight about what Southeast has been doing to try gaining the upper hand over TXAD. Given the severity of this alleged misconduct, TXAD had no choice but to file its own lawsuit against Southeast in Texas federal court. TXAD believes litigation is counterproductive to business endeavors and would prefer not to resort to the courts. Unfortunately, because that is the forum insisted upon by Southeast, TXAD will have to rise to the challenge and meet their much larger rival in court.
TXAD strongly denies that it has engaged in any wrongdoing whatsoever. For now, TXAD will continue to be the underdog who is simply trying harder to deliver a better service to its customers. In the end, TXAD hopes that being a better company and letting parks decide with whom they wish to do business is the best course to follow. For more information about AGS, visit its website at www.agspub.com