We found the following story fascinating–a business relationship between Perot Systems and the Union Bank of Switzerland (UBS). Entrepreneur Ross Perot used barter to “seal the deal” and catapult his new company forward…and quickly pocketed over a $1 billion as a result.

In 1996 Perot Systems, then a new computer startup with a famous person leading the company, was able to secure a contract to run the technology department for the Swiss financial giant’s investment bank and other units because of a Perot-envisioned barter offer.

Succinctly, UBS agreed to a 10-year agreement because of an exceptionally good offer and extra-special service…but also because they were provided an option to acquire 7 million shares of Perot Systems stock at $3.65 a share, when the company went public.

Perot Systems made such a barter agreement because they needed a substantial contract, and had to “outbid” their bigger rivals IBM and EDS. The UBS contract accounted for 25% of Perot’s revenue.

Less than three years after the contract/barter agreement was signed, Perot Systems became a publicly traded company. On the second day of trading, its stock was selling at $61 a share—and UBS was holding a $400 million windfall!

Founder Ross Perot fared exceptionally well on this barter deal with UBS too, as the agreement admittedly jump-started his new company plus his 38% stake was valued at $1.4 billion.

Expanding your business? Follow Perot’s strategy and you can rapidly move toward your end goal.

This entry was posted on Sunday, July 29th, 2007 at 5:03 am and is filed under Best & Brightest Barter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.