Seaway Valley Capital and North Country Hospitality Strike Merger Deal
Management to seek benefits from operational synergies, cross marketing and promotional opportunities
Last update: 10:21 a.m. EDT April 18, 2008Print E-mail RSS Disable Live Quotes
GOUVERNEUR, N.Y., Apr 18, 2008 (BUSINESS WIRE) -- Seaway Valley Capital Corporation (SWVC:SWVC
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SWVC, , ) ("Seaway Valley" or the "Company") today announced that it is merging into it the businesses of North Country Hospitality, Inc. ("North Country"), which is based in Watertown, NY and has assets throughout northern and central New York, in a transaction valued at approximately $11.7 million. To date, North Country Hospitality has assets of approximately $13 million and projects revenues of approximately $6.2 million for fiscal 2008. Together with Seaway and its subsidiaries, the combined company will have assets of roughly $31.5 million and pro forma annualized revenues of $36 to $41 million once Hackett's converts each of the WiseBuys stores. Seaway Valley, which focuses on making equity and equity-related investments in companies that require growth and expansion capital and has focused much of its activities in the same region, will form a new operating division that will continue to operate as "North Country Hospitality" and be run by current management at North Country.
North Country was formed in 2005 by Christopher Swartz and a team of local entrepreneurs including Gary Baker and Errol and Stephen Flynn to develop or acquire and operate lodging, restaurant, and recreational venues in and around northern New York, which is commonly referred to as the "north country" region of New York. In addition, North Country Hospitality seeks to acquire or develop strategic consumer products that complement its core hospitality businesses and that can be positioned for growth outside the region. The company's hospitality assets are positioned to benefit from regional tourism, which is one of the fastest growing industries in the area. And North Country's premium consumer products are well established locally but can be further positioned for growth outside the region.
North Country's ( www.northcountryhospitality.com) primary businesses include:
-- Sackets Harbor Brewing Company develops, produces, and markets micro brewed beers such as the award winning "1812 Amber Ale" and "Railroad Red Ale" as well as "Thousand Island Pale Ale", "1812 Amber Ale Light" and "Independence Wheat" specialty beers. Its "1812 Amber Ale" is the company's flagship brand and was the winner of a Silver Award at the 1998 World Beer Championship and has been aggressively marketed to command a significant retail presence in the regional market place. Management estimates 1812 Ale has an approximate 15% category market share within its primary distribution area and distributes keg and bottled beer to over 300 locations in northern New York. The company has also developed complementary products such Sackets Harbor Coffee and Sackets Harbor Brewing Co. Root Beer. Management is now focused on positioning the 1812 brand portfolio for growth outside the region.
-- Sackets Harbor Brew Pub is an operating "Brew Pub" that produces its own specialty beer on site while also offering fine dining. The Brew Pub offers six of its own brews on tap including each of its regionally sold beers such as 1812 Ale, Railroad Red, and Thousand Island Pale Ale as well as ever changing seasonal offerings. The Brew Pub restaurant represents the dual opportunity to expand this profitable concept through new locations with the additional benefit of further building the "1812" brand beers.
-- Goodfello's Brick Oven Pizza and Wine Bar is featured in charming interior of brick and wood and specializes in excellent-yet-affordable Italian food. The focal point of the restaurant is its large brick oven for cooking pizza, appetizers and special pasta entrees along a comfortable bar that offers a wide variety of wine and beer including Sackets Harbor Brewing Company selections. Goodfello's warmth and intimate atmosphere offers a unique setting rarely found in the marketplace for neighborhood Italian eateries, and management is currently evaluating several opportunities to expand the chain.
-- Sackets Cantina Sackets offers a traditional Mexican menu featuring the usual favorites as well as many excellent Mexican-inspired creations. The restaurant is set in a completely remodeled historic building expressing the bright colors and ambiance of Old Mexico and enhanced by a copper covered bar that offers varieties of Mexican beers and tequilas. The Cantina's signature dish is the "Molcajete" which is seldom seen in American Mexican restaurants. This and other creative dishes have positioned the Cantina as unique Mexican dining not experienced at most other multi-unit restaurants.
-- Jreck Subs Franchises ( www.jrecksubs.com) North Country now owns and operates five Jreck Subs franchise locations in northern and central New York including Watertown, Clayton, Cape Vincent, Alexandra Bay, and Liverpool. The Jreck Subs Company was started in 1967 by five local entrepreneurs, and since then, Jreck Subs has grown to over forty-seven locations in northern and central New York. The Jreck Subs concept is quality foods at moderate prices. Jreck Subs have a variety of hot and cold sandwich choices, homemade style soups, and a children's menu. The company will seek to develop or acquire additional Jreck franchises moving forward. (The Jreck Subs franchise chain is owned and operated by an entity owned by Christopher Swartz.)
-- Alteri's Bakery ( www.alteribakery.com) has serviced the north country region with quality baked goods since 1971, when Querino and Ida Jane Alteri purchased the bakery, which is still operated by the founders' son, Mark. Alteri's is now located in a state of the art baking facility in the heart of Watertown's business district, and is one of the last traditional Italian bakeries in the area. Alteri's brings four generations of baking experience and over 80 years of serving northern N.Y. with the finest "true" Italian breads and specialty pastry items, such as cakes, cookies, muffins, bagels, and specialty gift baskets. Alteri's products can be found at local restaurants, grocery stores, schools, and its own store. In addition, Alteri's recently assumed the production of sub rolls for the entire Jreck Subs franchise chain of 47 locations, which alone includes approximately two million five hundred thousand rolls baked and shipped annually.
-- Various Real Estate Assets are under development for future restaurants or retail outlets.
Operationally, acquisitions are quickly integrated into North Country with a focus on: (i) assistance in refining daily operations; (ii) allocation of strategic capital if needed; (iii) integration into North Country's advertising and marketing programs; and (iv) access to North Country's accounting, purchasing and administrative functions - all with the goal of driving revenues and streamlining operations to drive profitability. Ultimately, from this group of inter-related hospitality businesses North Country promotes a variety of destination packages that serve to extend the seasonal appeal of its properties, and add important new revenue streams.
Christopher Swartz, President and CEO of North Country, stated, "North Country is carrying out a strategy based on a platform of acquiring businesses that promise potentially many years of growth, not only for the operations located in the north country, but also in the retail product development and distribution that is expanding well beyond the local area." Mr. Swartz added, "The Seaway Valley merger will help North Country achieve this potential by marrying Seaway's established and growing retail outlets with North Country's growing portfolio of retail products, as well as further expanding the visibility of our hospitality holdings by extending our promotional reach." Mr. Swartz will continue to run North Country as a division of Seaway Valley and will also join Seaway Valley as its Chief Operating Officer and join the Company's board of directors with Thomas W. Scozzafava, Seaway's founder and Chief Executive Officer.
Mr. Scozzafava added, "I am excited about this transaction on a number of levels, including the strength and growth opportunity of the underlying businesses at North Country, as well as the skill and acumen of the management team coming to Seaway." Mr. Scozzafava continued, "We have already identified opportunities between our retail operations of Hackett's and certain North Country companies, whereby each could immediately benefit from a close relationship with the other. This deal made sense from the beginning, but each day I get even more excited about the potential of these two companies working together and investing in the region." While the transaction is effective immediately, the two companies shall seek additional approvals from various partners of the company including the Jefferson County IDA, Watertown LDC, and the North Country Alliance.
About Seaway Valley Capital Corporation
Seaway Valley Capital Corporation was formed in 2002 and makes equity, equity-related, and debt investments in companies that require expansion capital and in companies pursuing acquisition strategies. Seaway also seeks investments in leveraged buyouts and restructurings. Seaway will consider investment opportunities in a number of different industries, including retail, restaurants, media, business services, and manufacturing, and Seaway will also consider select technology investments.
About Patrick Hackett Hardware Company
Hackett's, one of the nation's oldest retailers with roots dating back to 1830, is a full line department store specializing in name brand merchandise and full service hardware. Hackett's, now with nine locations, features brand name clothing for men, women, and children, and a large selection of athletic, casual, and work footwear. Hackett's also carries domestics, home decor, gifts, seasonal merchandise and sporting goods. Hackett's full service hardware department features traditional hardware, tool, plumbing, paint and electrical departments.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company, and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
SOURCE: Seaway Valley Capital Corporation
Investor Relations:
CEOcast, Inc.
Gary Nash, 212-732-4300
or
Seaway Valley Capital Corporation
contact@seawaycapital.com
www.seawaycapital.com
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