The Empire Strikes Good

Tom Petters started Minnetonka, Minn.-based Petters Group Worldwide in 1988 as a trading company with little or no capital.

Under his management and guidance as chairman, the company has grown from a one-man operation into one that employs more than 1,200 people around the world. This private collection of 19 companies has offices in North and South America, Asia and the United Kingdom. It sells to the largest retailers in the world.

The companies develop and manufacture consumer goods using top technologies and represent some of the most recognized and troubled brands in the world including Polaroid and Sunbeam. Petters acquired two of the top direct-to-consumer businesses, which further leverage sourcing and distribution for the group. In 2002, he was a partner in acquiring and restarting Fingerhut, one of the largest catalog and direct mail companies in the U.S.

The following year, he acquired Chicago-based uBid, the second-largest Internet auction site. If you think it all sounds like a combination of Sony, GM and Hotpoint with a bit of Amazon.com thrown in, you’re not wrong. Petters seems to be building a comprehensive, integrated, one-stop aggregation of innovative technologies available to all consumers regardless of how and when they shop.

Using debt as a transaction instrument, Petters is a serial entrepreneur and savior who’s buying the savviest in technology innovators while rescuing great companies from oblivion, obscurity or both. His new company, Petters Capital, consists of a private equity fund and a debt fund that will provide financing for his various operating companies and lower the cost of capital.

A recent edition of Minnesota Business characterized Petters, his success and extraordinary achievements as follows:

In 2002, Petters went from an obscure business leader known primarily for his chain of closeout merchandise stores to near-celebrity status. His sudden claim to fame was a plan to buy large portions of the Fingerhut operations through his holding company before Fingerhut was shut down permanently by parent company Federated Department Stores.

With the recent acquisition of the Polaroid Holding Co., Petters Group Worldwide is on the verge of becoming Minnesota’s next multibillion-dollar private enterprise. Petters himself is on course to become Minnesota’s next entrepreneurial heavyweight. Serving as both chairman and CEO, Petters brought in what he says is a world-class management team.

Operating on a shared-services model, Petters Group Worldwide is the holding company for more than a dozen independent operating companies all with their own management teams. [He] is a recognized leader in creating, developing, financing and investing in companies that manufacture, procure and market merchandising solutions for key growth markets.

His core portfolio includes a growing list of retail and wholesale companies specializing in direct marketing including uBid and others in the U.S., Europe, Latin America, China, Japan and Mexico. His acquisition of Polaroid will drive growth by building on the strength of Polaroid’s trusted global brand and by introducing innovative new products for the digital age.

Petters leverages relationships with mega retailers (such as Minnesota-based Best Buy and Target as well as Costco, Sears and Wal-Mart) whose distribution channels help manufacturers access a wide range of consumers.

In addition to selling directly through his wholly owned affiliates (including Fingerhut, the catalog industry’s dominant general merchandise retailer), sellers can venture online free of fraud using uBid, which not only successfully uses the popular auction format but also provides manufacturers an outlet without worry to sell overstock inventory.

Petters Capital is investing emerging technologies and manufacturing joint ventures in mainland China that include these first-to-market technologies:

1. Appairent Technologies was spun off from Eastman Kodak Co. in January 2002. Its products utilize technology to deliver low-power and low-cost streaming multimedia applications to digital cameras and PDAs, televisions, MP3 players, laptops and digital camcorders.
2. Fidelica Microsystems develops biometrics technology for electronic security and access control. Its pressure-sensing technology is ideally suited for widespread and mainstream adoption of universal fingerprint identification and authentication solutions.
3. Qubic Light leverages Polaroid televisions along with other licensed and private-label brands by designing, developing and offering a light engine for rear- and front-projection TVs, home-theater projection systems and other specialty display applications.
4. SoniqCast makes wireless digital audio platforms to provide easy wireless access to music and audio content (including newspapers, radio, magazines and audible books). Its latest success is Aireo, the world’s first-ever portable wireless Wi-Fi Internet media player.
5. Symmorphix develops, manufacturers, markets and services thin-film products and processes for large-area systems used in producing rechargeable thin-film batteries, flat-panel displays, solar cells and light-emitting devices. This technology will be incorporated into next-generation devices and consumer electronics.

About uBid, Inc.
uBid is a leading brand name auction marketplace that offers consumers and businesses manufacturers merchandise at below wholesale prices. Founded in 1997, uBid has swiftly emerged as a major force in the e-commerce world. Formerly owned by CMGi, today uBid is a member of Petters Group Worldwide, uBid specializes in providing customers with savings on items from leading brands. In addition to uBid's own product listings, uBid features uBid Certified Merchant listings in which consumers will find items listed by uBid approved businesses. With more than 5 million registered users, uBid is committed to providing its valued customers with the highest quality experience on the Internet and offers manufacturer warranties on products. For more information, visit the company's web site at www.ubid.com.

About Petters Group Worldwide
Petters Group Worldwide^TM is a recognized leader in creating, developing and investing in companies that manufacture, procure and market merchandising solutions for key growth markets. Petters' core portfolio includes a growing list of retail and wholesale companies operating in the United States, Brazil, China, Japan, Korea, Mexico, and Spain. For additional information visit www.pettersgroup.com.

CONTACT:
Tony Priore
773.272.5000
anthonyp@ubid.com