Redneck Foods Inc. (OTC:RDNK) yesterday announced that the company had acquired the Love’s BBQ chain.
Under the terms of the acquisition agreement, Redneck will purchase Love’s for a combination of stock and notes.
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The Love’s shareholders will receive 4,000,000 shares of Redneck common stock and a promissory note for $666,150. In addition, Redneck will assume a promissory note to a Love’s shareholder for $133,850. The promissory notes are for a term of one year and pay interest at 10 percent annually.
In return, Redneck will receive all the outstanding common stock of Custom Food Franchise Group Inc. and Mission Valley Love’s BBQ Inc. Custom Food Franchise Group Inc. is the operator and franchisor of the Love’s chain of restaurants. Mission Valley Love’s BBQ Inc. is a Love’s restaurant operating in San Diego, Calif.
The Love’s chain is composed of 11 midscale BBQ restaurants located in Southern California, Nevada, New York and Indonesia. Sales of the chain were in excess of $9,000,000 in 2000.
Commenting on the new agreement, William E. Eskew, president of Redneck Foods Inc., stated: “We are very pleased and excited with this agreement to acquire Love’s BBQ. Love’s is a very respected brand that’s been operating in the important Southern California market since 1948. The acquisition offers Redneck Foods the potential for significant income with a minimum investment. Plus, we believe Love’s is a solid growth vehicle, especially with the resources of a public company supporting Love’s. Our plans for three to five new Love’s in the next 12 months are now very realistic. Hopefully, this is the first acquisition of many planned by the company.”
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By GlobalDataEskew also noted that he was the majority Love’s shareholder. Because of this, the outside Directors of Redneck evaluated the worth of Love’s BBQ and arrived at the purchase price, and Eskew did not participate in the decision to purchase Love’s.
This news release may contain forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company’s products and restaurants, product demand, competition, and other risks and uncertainties detailed from time to time in the company’s periodic reports, including Quarterly reports on Form 10-Q and Annual Reports on Form 10-K.
