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WISEBUYS STORES, INC. RECEIVES FINANCING COMMITMENT FOR HACKETTS ACQUISITION
Term Sheet Received for $4,000,000 from the Stillwater Asset Backed Fund LP and The Oxbridge Group
NEW YORK, NY, August 2, 2007 – WiseBuys Stores, Inc. (“WiseBuys”) announced today that it has received a Term Sheet for up to $4 million in financing for the acquisition of Hacketts from New York-based Stillwater Capital Partners, Inc. The financing, which is being arranged and managed by The Oxbridge Group, is subject to final due diligence, the completion of definitive agreements, and $300,000 in additional equity investment.
As reported previously, WiseBuys executed an agreement with Hacketts owners to acquire 100% of the stock of Patrick Hackett Hardware Company (“Hacketts”). Hacketts, which is one of the nation‟s oldest retailers, currently has stores in New York State in the villages of Canton, Ogdensburg, Massena, Potsdam, and Watertown. WiseBuys current locations include Canton, Gouverneur, Hamilton, Pulaski, and Tupper Lake – all also in New York State.
“We are pleased to announce this financing offer, which would facilitate our acquisition of Hacketts,” stated Thomas Scozzafava, a co-founder of WiseBuys and current CFO. “This Stillwater financing would be the bridge capital needed to complete the transaction, and we would then seek traditional bank debt and equity capital to help grow the company,” Mr. Scozzafava added.
The acquisition, which calls for a $1.5 million payment at closing and additional payments of $4.5 million over eight years, includes management agreements for the retention of the founding family members as well as Hacketts current CEO.
About Hackett’s:
Hackett‟s is one of the oldest retail establishments in New York State and the Nation. Its origins date back to 1830 when it was a ships chandlery, wholesale supplier and a traditional hardware store. During its evolution, it would also become a supplier of railroad equipment, builders and contractors‟ supplies, plumbing supplies, steam fitting, tinsmithing, and a large foundry manufacturing many lines of metal plumbing items that you still find in existence today. Over the years, the company has adapted to changing market conditions and evolved into a full line department store focused on premium clothing, footwear, and gift items and today consists of five (5) locations:
(i) Ogdensburg, NY (55,000 sq. ft.) - full line department store also featuring a coffee shop serving breakfast and lunch gourmet specialties called North Water Street Coffee Company;
(ii) Potsdam, NY (41,000 sq. ft.) – a recently-opened (2004) full line department store
(iii) Watertown, NY (56,000 sq. ft.) – newly-opened (4th Qtr „06) full line department store
(iv) Massena, NY (12,700 sq. ft) - Hackett‟s only mall location opened in late 1999 with a focused selection of premium clothing, footwear, and gifts;
(v) Canton, NY - a full line footwear department, apparel for men and women, and a sporting goods department; (this would be closed and the building sold or leased and operations moved to WiseBuys.)
Hackett‟s has an outstanding reputation within the industry as a customer service-focused organization selling premium products at a fair price – both of which differentiate it from “discount” big box retailers.
About WiseBuys:
WiseBuys Stores, Inc. (“WiseBuys”) was formed and began operations in 2003 as a direct result of the closing of small-town retail staple, Ames Department Stores. Founded primarily by lifelong “north country” residents, WiseBuys initially focused its efforts on serving the “discount” retail needs of mostly rural communities throughout northern and central New York.
WiseBuys‟ strategy included an innovative approach whereby it partnered with established and successful specialty discounters to create a “mall without the walls” concept. This innovative approach made easier to expand rapidly (five stores in thirteen months) because less capital was required for inventory, and partnering with niche players made immediately competitive across certain product lines. That is, although WiseBuys has only five stores, its pricing reflected the established purchasing power of Payless, KB Toys, etc. And from the customers‟ perspective,
WiseBuys had created a full line department store virtually over night. The concept was embraced by large, well-established retailers and was heralded in the industry. The following in-store retail partnerships with both national and regional chains were established: Payless ShoeSource, Inc. – “store-within-a-store” deal across chain KB Toys Inc. – exclusive license agreement “KB Toys at WiseBuys” branded department RadioShack – franchise acquisitions Card$mart, Inc. – franchise acquisitions Home Fashion Distributor, Inc. – consignment inventory deal for domestics Masters, Inc. – leased department deal for apparel (consignment inventory) Massey’s Furniture Barn, Inc. – consignment inventory deal for furniture & mattresses
In addition, WiseBuys won such awards as the “New York State Small Business Development Center Excellence Award” (April ‟04) and the “Oswego County Job Creation Award” (June ‟04). WiseBuys current stores include the following:
(i) Canton, NY (40,000 sq. ft.) - full line department store;
(ii) Gouverneur, NY (53,000 sq. ft.) – full line department store;
(iii) Hamilton, NY (43,000 sq. ft.) – full line department store;
(iv) Pulaski, NY (59,000 sq. ft) - full line department store; and
(v) Tupper Lake, NY (34,000 sq. ft.) - full line department store.
Both WiseBuys and Hacketts will be subject to completed audited financials. WiseBuys recently engaged Syracuse-based accounting firm Dannible & McKee, LLP (www.dmcpas.com) to complete these audits.
GS Carbon, which was acquired by Seaway Capital and is changing its name to Seaway Valley Capital Corporation, is seeking additional debt and equity investments in retail, restaurants, media, business services, manufacturing, and technology companies.
About Seaway Capital, Inc.
Seaway Capital, Inc., which was formed in 2002 as “Seaway Capital Partners, LLC”, makes equity and equity-related investments in companies that require expansion capital and in companies pursuing acquisition strategies. Seaway Capital also seeks investments in leveraged buyouts and restructurings and will consider investment opportunities in a number of different industries, including retail, restaurants, media, business services, and manufacturing. Seaway Capital will also consider select technology investments.
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.
For more information, please contact:
Seaway Capital Corporation
Email: contact@seawaycapital.com
Web: www.seawaycapital.com
Investor Relations:
Andrew Hellman
CEOcast, Inc.
Phone: 212-732-4300
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