Stronach Forms Six Publicly Held Companies

Frank Stronach, the prominent owner-breeder who was among the leading yearling purchasers of 2011, and related entities have filed documents to establish six companies that would sell shares to the public for $10 per share.

The companies—each named for prominent horses owned and/or bred by Stronach through the years, will operate racing stables under management of Golden Pegasus, a privately held company solely owned by The Stronach Group. The racing corporations are named after Stronach’s horses Awesome Again, Ghostzapper, Ginger Punch, Macho Uno, Perfect Sting, and Red Bullet.

According to the registration papers filed in December with the Securities and Exchange Commission, 405,000 shares will be sold in each company, raising $4,050,000. Each company would race horses purchased as yearlings last year and are now 2-year-olds as of Jan. 1, 2012. The yearlings were all purchased by Alpen House, which is controlled by the Stronach family trusts and which provided the operating capital so far for the racing companies, which began operations in September.

The filings state that the day-to-day care, training, and management of the horses is expected to take place at Stronach’s Adena Springs facilities and at the racetracks where they are stabled. Horses will be raced through late 2013, at which time they will be sold. It is not anticipated that any of the horses would make their career debuts until August of 2012.

According to the filings, about 27% of the total $4,050,000 from the stock offering will be used to repay expenses related to the establishment of the companies.

Golden Pegasus, which will be responsible for all aspects of training and maintenance of the horses, including selection of trainers, will be paid a day rate of $150 per horse for actively managed horses and $50 per day for horses that have been retired, whether or not they are being retained for purposes other than racing. Also, each company will set aside $100,000 for emergency veterinary expenses.

Golden Pegasus, which will have 10% ownership of each corporation, consists of Stronach, who serves as chairman; Jack Brothers, Alon Ossip, Howard Walton, Lorne Weiss, and Ron Charles. Michael Rogers is listed as Golden Pegasus’s CEO, Mark Roberts is the company president, and Lyle Strachan the chief financial officer. Brothers is named as CEO of each of the individual companies.