Daniels Corporate Advisory Co Inc (OTCBB:DCAC) announced the letter of intent (LOI) for the first acquisition transaction carried out by its food and beverage group’s entertainment/club segment. The potential club acquisition generates over $2 million in annual revenues and more than 17% earnings before taxes.
As per the reports, the club is located in a Long Island suburb, which makes it a key destination attracting continuous user visits.
Insights of The Matter
Not long ago, Daniels announced that its Food and Beverage Group, which was formed in July 2015, would exclusively focus on acquiring Italian Clubs and Café’s with Entertainment beat in the metro sites of New York. The acquisition target is known for offering good quality entertainment, giving Daniels’ Food and Beverage Group a perfect platform to expand its demographic appeal. Reportedly Food & Beverage Group may look forward to opting for increased food offerings and different acts to enhance its demographic presence.
The most important part of this deal is the retention of human capital. Besides, a one-time annual advisory agreement, Daniels intends to retain the service and operation personnel after the acquisition. It is likely to recruit efficient advisory board members and one operation manager to make sure that operational and strategic moves don’t suffer in the future.
Terms of LOI
Under this letter of intent, Daniels decided to make an initial cash payment. The remaining payment is to be made via a note payable in year two and three respectively. If the seller wants, it can convert that payable note into shares in Daniels Corporate Advisory at a discounted market value and accept them instead of the note, a move that will benefit both seller and buyer.
The senior management team of Daniels is pleased to announce this first of many acquisition deals, and hopes that the company will keep the same momentum in the future as well.
