OHNA NEWS- looks strong today
Ohana Enterprises Pursues Acquisition Strategy
Wednesday October 6, 4:15 pm ET
MALIBU, Calif.--(BUSINESS WIRE)--Oct. 6, 2004--Ohana Enterprises, Inc. ("Ohana") (OTCBB:OHNA - News) today announced that it has entered into a non-binding Memorandum of Understanding ("MOU") to acquire 100% of the assets of an established 31-year-old California business valued at approximately $10 million.
The business, whose name is being withheld for reasons of confidentiality, is a leader in a niche market. It currently generates approximately $1.5 million in annual revenues, with a gross margin of approximately 43.2% and EBITDA of approximately $50,000 (all numbers unaudited).
Commencing immediately following the filing of its annual report on Form 10-KSB, Ohana will begin to conduct due diligence on this prospective acquisition to determine the viability and value of the aforementioned property and assets. Management believes it will take approximately 4 to 5 months to complete the due diligence process of this specific acquisition candidate, which would include inventory testing, building inspections, and a complete 3-year trailing audit of the selling company's financial statements. Management has already made several visits to the location of the selling business for initial qualification, quantification, and inspection of property, inventory, and assets to determine if it is necessary to proceed to the next phase of conducting intensive due diligence. Upon satisfactory completion of this due diligence, Ohana would secure and execute definitive purchase agreements to complete the acquisition of the business and assets described in the MOU. Due to the sensitive nature of the Seller's business and relationships with its distributors, the Seller has requested for the protection of the Seller and Buyer that the name of the Seller be withheld until time of closing.
"We are pleased to have the assistance from our new partners in New York for the added capital in order for the Company to move forward with its strategy of seeking this acquisition candidate to facilitate the Company's growth plans," stated Company CFO Catherine Thompson. "With this acquisition, Ohana and GarcyCo Capital Corp. will work together in attempting to achieve a listing on a national exchange. We believe the Company will then have the necessary requirements to satisfy such a goal and that such a milestone achievement will be of benefit to its current and future shareholders."
The terms of the agreement are to acquire one operating division for $6 million at a purchase price consistent with the Stock Purchase agreement dated September 14, 2004, by and between the Company and GarcyCo Capital Corp, and to acquire the second operational division within three years at a set purchase price of $4 million under the terms of the same conversion price. The first acquisition consists of approximately $6 million in assets, including, but not limited to, land, buildings, inventory, production equipment, contracts, distribution relationships, etc. The second consists of $4 million in like assets to complement the first. Collectively the two divisions are producing and selling at approximately 25% of current capacity. The Company's initial plan is to increase sales by refining and perfecting the product; and defining and implementing a marketing plan that will complement the improved product and piggy back on the existing loyal distribution channels and customers. The Company will seek to push production and sales to 100% capacity, thus driving its revenue base. Subsequently, Ohana will seek to continue its growth plan through the addition of complementary acquisitions at a later date.
