CEO of Rotmans parent company lays groundwork for retirement, acquisition
Courtesy | Vystar Corp.
Steve Rotman, president and CEO of Worcester manufacturer Vystar Corp.
Subsidiary: Rotmans Furniture
New parent co.: RxAir NewCo
Subsidiaries: RxAir, Fluid Energy Conversion Inc, and Vytex
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Steve Rotman, the 82-year-old CEO of Worcester manufacturer Vystar Corp., is restructuring his companies as part of a larger effort to transition to a new leader of the parent company with holdings including his family business Rotmans Furniture.
"It is time for someone to replace me," Rotman told WBJ in an interview Wednesday.
Vystar Corp., announced on Wednesday it was restructuring its subsidiaries into their own publicly traded companies in order to reposition itself for a future reverse merger.
Founded in 1956 by Murray and Ida Rotman, Rotmans Furntiure and its 200,000-square-foot Worcester retail space have become iconic in the region's business landscape.
The reverse merger strategy is part of a larger transitional strategy as Rotman ultimately searches for his own replacement. While Rotmans Furniture has been a Worcester landmark and family-owned store for more than 60 years, the next generation of Rotmans have found their own career paths outside of the furniture industry, he said.
Rotman told WBJ he was “feeling like it was time to pass the baton."
Along with the local notoriety of its brand and name, Rotman’s Worcester location makes it centrally accessible in Massachusetts as well as New England. Rotman said the furniture store is a prime opportunity for other potential furniture stores who are looking to expand into the New England market.
In addition to Rotmans Furniture, Vystar is also the parent company of RxAir, and Fluid Energy Conversion Inc. RxAir specializes in UV light air purification systems while Fluid Energy Conversion, Inc. harnesses sound energy to destroy bacteria and improve water processes.
In addition to RxAir and Fluid Energy Conversion Inc., Vystar has a third subsidiary and publicly traded company known as Vytex. Vytex is the brand name of the firm's patented natural rubber latex materials and dry rubber products which are currently in development.
Throughout the years, Vystar has been approached by many businesses seeking to merge with its various Vystar subsidiaries. While Vystar’s three health-focused companies garnered a lot of outside interest, the inclusion of a furniture store did not fit the theme and dissuaded potential investors. As a result, Rotman decided to divide the companies and execute a reverse merger to streamline the process for future parties interested in Vystar and its subsidiaries, he said in an interview.
“It is a lot easier through a reverse merger because we’ve already done the work,” Rotman said about laying the groundwork for a future transition.
Rather than a one-time buyout, Vystar analyzed a reverse merger would be more beneficial for the company by offering a higher revenue, $100 to $150 million more, and result in increased buying power, according to the release.
The new company, temporarily named RxAir NewCo, will include RxAir, Fluid Energy Conversion Inc., and Vytex.
As the new RxAir NewCo becomes its own publicly traded entity, Vystar will still retain a Vytex license allowing for the use of Vytex latex materials in the manufacture and retailing of mattresses, pillows, bed toppers, and upholstered furniture for Rotmans Furniture.
The subsidiary spin-offs would allow Vystar and its Rotmans subsidiary to have a singular focus on the retail furnishings and mattresses market, making it more appealing for prospective furniture or bedding retailer merger partners desiring to become publicly traded, without the burden of additional subsidiaries unrelated to their core focus.
This new strategy would open opportunities for companies interested in a potential reverse merger into the Vystar parent company and its Rotmans subsidiary. Currently, three to four companies are in discussions with Rotman about potential mergers, but he expects that number to increase.
“The future of our employees and continuity are of paramount importance and will be driving factors in management’s choice of a merger partner. We expect to have the reverse merger complete mid-year of 2022,” said Rotman in the written press release
CORRECTION: A previous edition of this article incorrectly identified Vytex as a new subsidiary and manufacturing plant. Instead Vytex is a pre-existing subsidiary of Vystar which issues licenses to have its patented natural latex materials produced and manufactured by other parties.
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LET'S REVIST THIS ONE PLEASE! WE NEED AN UPDATE FROM STEVEN!
No updates since. Please follow up on this story. Something smells fishy to me.
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