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Poof! The ad world may soon learn the difference between puffery, a standard technique, and poofery, a recent Wall Street maneuver. It has become fashionable--and profitable--for financial engineers to package a group of companies in some fragmented industry, create a new holding company and take the whole shebang public. The IPO is important; it raises cash and creates a marketable security, both of which are used to acquire the new holding company's constituents. If poor stock-market conditions stymie the offering, the new holding company might never emerge. But if conditions are right, then "Poof!" a new company is born. A recent filing with the SEC describes a prospective IPO for US Marketing Services. USMS has lined up five below-the-line entities in areas such as marketing field-force operations and in-store display manufacturing. Not exactly advertising, but close. The ad industry, with its hundreds of excellent but small participants, seems suitable for "Poof!" consolidation, and with a buoyant stock market, one may float by. --Alan Gottesman (westendal pobox.com) is principal of West End Consulting.


THE GOTTESMAN FILE
US Marketing Services hopes to consolidate these companies concurrently with an initial public offering of stock.

..........Latest annual.....Latest annual.....
.....Company.....revenues.....profits.....Business
.....Brand Mfg......$17.5.....$1.7.....POP display mfg.
.....Certified Marketing.....$10.4.....$0.5.....Cinema marketing
.....MCI Performance.....$42.9.....$1.6.....Incentive travel
.....SPAR Group.....$36.8.....$4.7.....In-store marketing
.....TCE Corp......$2.1.....$0.9.....Trucking

Source: SEC filings. Dollar figures in millions. POP = point of purchase