2 companies merge assets
DEAL WORTH $11.7M: Alteri's, brewery linking with Hacketts; no jobs will be lost
By RACHAEL HANLEY
TIMES STAFF WRITER
FRIDAY, APRIL 18, 2008
The parent company of Hacketts department stores has merged with the parent of Alteri's Bakery and Sackets Harbor Brewing Co.
On Thursday, the heads of Seaway Valley Capital Corp. of New York City and North Country Hospitality, Watertown, announced they had combined to form a company with about $31.5 million in assets.
The merger transaction, valued at about $11.7 million, creates an entity with some 600 employees and projected annual revenues of $36 million to $41 million.
Under the merger, North Country Hospitality, with approximately $13 million in assets, will become an operating division of Seaway Valley Capital Corp. No layoffs are expected as a result of the deal.
Seaway Valley holdings will now include Sackets Harbor Brewing Co., Sackets Harbor Brew Pub, Sackets Cantina and Good Fellos Brick Oven Pizza and Wine Bar, all in Sackets Harbor; Alteri's Bakery, Watertown, and five franchise locations of Jreck Subs.
North Country Hospitality was formed in 2005 by Mr. Swartz; Seaway Valley, formerly known as GS Carbon Corp., was formed in 2002.
North Country President and Chief Executive Officer Christopher M. Swartz will run the North Country division; he also will assume the new role of chief operating officer of Seaway Valley. Thomas W. Scozzafava will retain his position as CEO of Seaway Valley.
Ultimate Franchise Systems Inc., the franchiser of Jreck Subs and other restaurant chains, will remain a separate entity with Mr. Swartz as CEO.
In a meeting Thursday at the North Country Hospitality corporate offices, the heads of both companies said merger discussions started after the two men met during a football game last fall.
Mr. Scozzafava was searching for a way to expand his retail offerings while keeping the administrative side of his growing business under control. Seaway Valley was in the process of converting the five WiseBuys it owned to Hacketts stores, which it had acquired in November.
Mr. Swartz, who had the administrative and retail sides licked, was looking for opportunities to promote the North Country Hospitality brands.
"Some things on the face of them made so much sense," Mr. Swartz said. "So many of the things we were trying to do separately would be made easier and more efficient, and therefore more profitable, doing them together."
Still, several months were needed to work out details and to make sure the businesses fit, Mr. Scozzafava said.
"This is a marriage," he said. "There was a dating process, and that takes time."
Mr. Scozzafava and Mr. Swartz said the Seaway Valley and North Country merger will help both businesses streamline operations, increase bulk buying power and open up opportunities for cross-promotion.
"Brand recognition is expensive," Mr. Swartz said. "If we can both piggyback on each other's brand equity, I think that brings a tremendous power to all the brands now as a whole."
Since retail stores such as Hacketts are slower in the summer, when the Sackets Harbor eateries are at their peak, the merger should help stabilize cash flows for the parent company. As a larger business, Seaway Valley is likely to get better deals when it comes to raw materials, fuel, health care and insurance, Mr. Swartz said.
With so many brands under the same roof, Mr. Scozzafava said, the company will not pursue a lot of "horizontal growth" and will instead focus on building recognition for the various holdings.
That said, he expects to continue adding to his north country holdings when the acquisitions are timely and fit well with the other brands. He also expects to open at least one or two new Hacketts stores this year, eventually pushing into Vermont.
"I wouldn't be surprised if there's a few more acquisitions, but it's not going to be a new line of business. They're going to be within this context," Mr. Scozzafava said. "Our main focus is going to be to get this jelled."
SOURCE:
www.watertowndailytimes.com/article/...EWS03/952796910/-1/news
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