Term Sheet Received for $4,000,000 from the Stillwater Asset Backed Fund LP and The Oxbridge Group
NEW YORK -- 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)
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