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purchase all of the issued and outstanding stock of State Supply
for $6 million.
The offer proposed that the stock purchase be accomplished
by a cash merger (the acquisition) with a new corporation to be
organized by Von Allmen and Olson. There were no provisions for
covenants not to compete (sometimes referred to as noncompete
agreements) in the offer. The offer provided that State Supply
would permit Group One or its advisers full access to all of its
properties, books, and records as may be reasonably requested.
The acquisition took place on October 29, 1987.
Holliday and Beaurline as Potential Competitors
During their investigation of State Supply, Von Allmen and
Olson discovered that Holliday had been with State Supply for 26
years, since its inception and had developed extensive
relationships with customers over those 26 years as the "right
arm" of the founder of State Supply, Jim Lewis. Holliday had
sufficient money to go into competition with State Supply after
the sale of her stock to Group One.
During the investigation, Von Allmen discovered that
Beaurline had been in the beauty supply business for 36 years,
had been with State Supply for 8 years, knew the suppliers and
customers very well, was well known in the beauty supply
industry, and had served as master of ceremonies for
manufacturers' sales meetings and beauty shows.
Prior to joining State Supply, Beaurline held positions with
distributors and manufacturers in the beauty supply industry and
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