Seaway in Discussions with Several Companies for Investment or Acquisition
Seaway Valley Capital Corporation (OTC Bulletin Board: SWVC) (“Seaway Valley” or the “Company”) chairman and chief executive officer, Thomas W. Scozzafava, issued the following update to its shareholders today: Dear Shareholders: Since July of 2007, Seaway Valley management has focused on building a regional and super regional portfolio of complementary assets in the retail and consumer products industry. Seaway Valley’s objective is to acquire or invest in companies in need of growth or expansion capital and that can also leverage and benefit from synergies across Seaway Valley’s existing portfolio. Benefits could be achieved through the reduction of expenses by means of shared resources such as transportation, marketing, advertising, and administration, as well as immediate cross marketing and selling opportunities. Seaway Valley portfolio companies should also benefit by leveraging the Seaway Valley network of company management teams – each having unique backgrounds, qualifications, and skills.
In relatively short order the Company acquired both WiseBuys Stores, Inc. (“WiseBuys”) and Patrick Hackett Hardware Company (“Hackett’s”), now together operating as Hackett’s. Hackett’s represents the Company’s largest investment to date and its core platform asset around which to build. Management anticipates that once all five former WiseBuys stores are converted to Hackett’s stores and all nine stores operate continuously for one complete fiscal year, revenues of the initial stores should be approximately $35 million per year. New full format Hackett’s stores would add, on average, $2 - $4 million per year in sales, and Hackett’s management is already reviewing a number of potential expansion sites. It is likely, however, that expansion will occur only after all five former WiseBuys stores are fully converted. Management has also identified approximately $500,000 in immediate potential expense reductions by combining the two companies into one.
Recently Seaway Valley announced that it executed a term sheet and is in final negotiations to acquire a regional hospitality and consumer products company with recent revenues and assets of approximately $5 million and $13 million, respectively. The company, which has gross assets of approximately $13 million and revenues of just over $5 million, specializes in consumer products and is based in Upstate New York region.
Seaway Valley is also in preliminary discussions with three other acquisition / investment candidates. These include: (i) one regional retailer, (ii) one regional retailer and wholesale distributor, and (iii) one national consumer products company. All discussions are considered serious but are still in the very early stages. Aggregate revenues of all three are projected to be in the $22-$24 million range for 2008.
Management is focused on creating shareholder wealth with the potential addition of these assets and will continue to work to deliver these and others into the portfolio if and when appropriate. Additionally, with less than $100,000 of the legacy sub-penny convertible debentures remaining, we expect the significant dilution to subside shortly. Thank you for your continued patience and participation, and we look forward to additional activity in the coming months.
About Seaway Valley Capital Corporation Seaway Valley Capital Corporation 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.
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.
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