Firm Reports Tentative Sale of Barter Business

A La Canada Flintridge anesthesiologist has signed a letter of intent to buy Business Exchange’s barter operation for more than $1.5 million, the North Hollywood-based company announced Monday.

Dr. Sherman L. Kearl, 49, who has bartered real estate with the company for more than five years, declined to comment on the transaction, other than to say that more negotiations are necessary to reach a final agreement.

The company reported, however, that Kearl agreed to make a $510,000 down payment for the business and to pay off the rest over five years at an annual interest rate of 10%. According to the firm, the book value of the assets of its bartering business is about $450,000.

Arranging barters has traditionally accounted for most of Business Exchange’s revenue. For the nine months ended April 30, the company earned nearly $88,000 on revenue of $2.2 million. During its fiscal year ended July 31, 1985, Business Exchange lost $337,000 on revenue of about $3.2 million.

26-Year-Old Company

Founded in 1960 by Marvin J. McConnell, Business Exchange was solely in the bartering business until 1983, when the company acquired a real estate development unit, which it now calls BX Realty.

The bartering unit lists about 10,000 participating businesses that trade everything from credit at bookstores to the services of mortuaries.

“It’s with pangs of regret that I’m getting out of bartering,” said McConnell, chairman and president. “You don’t live with something for 26 years and give it up easily.”

He said the company had not been looking for a buyer but was approached recently by several potential suitors, including Kearl.

McConnell said the firm now plans to focus on its two remaining divisions, BX Telco, a private pay telephone distributor, and BX Realty, which is building 296 condominium units in Pomona.