For the last several days there have been a plethora of comments posted on the numismatic forums concerning ANACS, the oldest third party coin grading service, having shut down its offices in Austin, Texas. As information trickled in from various sources we are just starting to get a clearer picture of the events that transpired.

The following notice has been posted on the ANACS Website:

“ANACS has recently been sold by Anderson Press Incorporated to Driving Force, LLC, of Colorado, owned by James Taylor. The purchase was effective December 21, 2007, and the company is being relocated to suburban Denver, Colorado.

The office is currently closed for the holidays to allow time for the move. The order tracking system along with the population report are currently down for the holidays and should be available again January 4, 2008. “

The notice goes on to state:

“Business will resume and submissions will begin to ship out January 2, 2008. If there are any questions please don’t hesitate to contact Mr. Taylor at: James.Taylor@anacs.com The new ANACS office will be located at: 6555 S. Kenton St, Suite 303 Englewood, CO 80112 1-800-888-1861 “

However the story is a bit more interesting than the rather benign announcement posted.

There was a posting on the PCGS forum attributed to Mike Ellis, a now former authenticator and grader at ANACS. He is quoted as saying:

I returned home from visiting my brother for Christmas in the wee morning hours on the 26th. Shortly after waking I received a call from Tim Hargis, former Senior Numismatist and an exceptional numismatist at that. He informed me that many “developments” had taken place at work and it would be best if I came in and was told face-to-face of the changes.

I arrived at what used to be ANACS Austin at around 11:30 a.m. As soon as I walked in I knew something was terribly wrong. Everyone was packing, including a crew for hire with a Mayflower truck! Tim Hargis was already gone. Several ex-employees told me what was up and then I got my chance to meet with James Taylor who had been a good friend of mine for years. This is what he told me:

“I have formed a new corporation, Driving Force, LLC. I have purchased ANACS and we have to be in a suburb of Denver, ready to do business by January 2nd. ANACS will fall under the umbrella of Driving Force and we will continue to do business as ANACS. (He then told me some of their plans and the direction they were heading but that is inconsequential and you will see much more of those plans come to light in the coming months.)

I tried to purchase ICG. The deal fell through. I have left ICG and so have most of the people at ICG, at greatly reduced salaries until we get up and running. When the deal to buy ICG fell through I called Mary Counts to inquire if Anderson Press would be interested in selling ANACS. Mary said that they had not thought about it but would run it by the board. Well, our buy/sell figures were workable and I told my lawyers to get the deal done in four weeks. (This all started in early November.) They told me it could not be done and they were right. It took six weeks. We want you but you have to do what you have to do because until we know if our plans work out we can’t hire you.” That was that.

The situation does raise a number of interesting questions, most of which we hope to clarify in the near future.

Although the sale of ANACS seems to have taken everyone by surprise, especially the unfortunate employees who have lost their jobs without any forewarning, one source has told CoinLink that ANACS was quietly being “shopped around” for a number of months prior to this. We have no independent confirmation of this as fact.

The sale price of ANACS has not been disclosed as yet, but another CoinLink source indicated that Driving Source LLC, the company that purchased ANACS, is made up of Mr. Taylor and several other investors. So, it would seem that Mr Taylor is not the sole owner of the venture and other players are involved. We are working to identify these investors to obtain comments from them.

Somewhat lost in this story is the effect on, and possible demise of ICG.

If we are to take the purported comments of Mr Taylor at face value, ICG turned down his offer to buy the company. He then cuts a deal with Anderson Press (in record time) to buy ANACS and then moves the operation into the same city as ICG and lures the majority of staff and graders to the new ANACS operation (from all reports, none of the Austin based graders were asked to move to Colorado at this time). If true, who is going to be left at ICG? Certainly one would expect that a move such as this would cripple ICG operations in the short term and potentially due severe damage to their bottom line.

Also one needs to figure in the markets that a new ANACS will focus upon. Up until now, ANACS seems to have been content being a folksy down to earth grading service catering to the more modest collector base. When they stopped giving out free grading opinions at shows they lost some of the good will they had built up over the years, but variety collectors still seemed to find a home dealing with ANACS.

Some people have suggested that the New ANACS will redirect their focus to try to dominate the Modern Coin Grading market, which would put them into more direct competition with ICG, again not good news for ICG.

As mentioned, all of this will get sorted out in short order, and I would expect to see more announcements, explanations and spin generated at the FUN show as all of the parties involved try to put the best face on the situation as possible. Ultimately the outcome will depend on the how resilient ICG is and if the new ANACS headed by Mr Taylor (for the second time) can leverage its talent and brand name to attract new customers and volume dealers who share whatever new vision ANACS projects into the marketplace.