DoveCorp Enterprises Inc.

DoveCorp Enterprises Inc.

August 11, 2005 07:20 ET

DoveCorp Acquires Cadet Cleaners

TORONTO, ONTARIO--(CCNMatthews - Aug. 11, 2005) - DoveCorp Enterprises Inc. (TSX VENTURE:DOV), one of Canada's leading dry cleaning and laundry service companies, today announced it has completed its share acquisition of Cadet Cleaners, an award-winning, Toronto-based dry cleaning franchisor with 67 outlets in the Greater Toronto Area (GTA). With this acquisition, DoveCorp is now the largest dry cleaner in Canada, with anticipated annual sales of more than $10 million.

Cadet comprises 4 companies which collectively manage and provide retail and commercial dry cleaning services for 45 franchised and three corporate owned locations under the "Cadet Cleaners" retail banner and 16 franchised and 3 corporate dry cleaning locations operating as Factory Outlet Cleaners. Cadet's audited consolidated financial statements for the year ended October 31, 2004 reported revenues of approximately $4.02 million with net earnings of approximately $319,000, total assets of approximately $2.24 million and total liabilities of approximately $2.21 million.

The acquisition was an arm's length transaction completed pursuant to a share purchase agreement dated August 10, 2005 among Jim Karagiannis, Gus Karagiannis and their respective spouses, as vendors, and DoveCorp. The purchase price for Cadet, subject to adjustment, was $2,600,000: $600,000 in cash ($500,000 paid on closing with the balance paid within 60 days following closing) and 4 million DoveCorp common shares at an ascribed value of $0.50 per share. One million of the DoveCorp common shares paid to the vendors are being placed in escrow for approximately 7 months. The purchase price paid by DoveCorp was based on the consolidated net liabilites of Cadet not exceeding $1.45 million. In the event that the purchase price is adjusted downward because Cadet's consolidated net liabilities exceed this threshhold, the corresponding number of these escrowed shares, based on the ascribed per share value, will be forfeited to treasury and cancelled.

The two principal shareholders of Cadet, Jim and Gus Karagiannis, will form part of DoveCorp's ongoing management team. Jim Karagiannis will serve as Director of Business Development and Franchising and Gus will serve as Director and General Manager of Drycleaning Operations.

"We are very excited to have the Cadet and Factory Outlet brands and locations to add to the existing Dove brands," Sam Mizrahi, President and CEO of DoveCorp, said. "As the largest drycleaning business in the GTA, we will continue to seek further acquisition opportunities to grow the business. Jim and Gus Karagiannis are seasoned and experienced additions to our management team and we very much look forward to working closely with them and their team. With Jim working on the sales and business development side and Gus adding to our operational strength, we will continue to focus aggressively on growth."

Jim Karagiannis said, "We recognized the business efficiencies that could be obtained by combining with DoveCorp and we believe that DoveCorp will provide a powerful platform to support and extend our franchise network. We see strong advantages to integration, and it is our intention to adopt the best practices of each company as we build our brands together by growing market share and expanding sales."

Norman Hertzman, COO of DoveCorp, said, "I look forward to working closely with Gus Karagiannis in managing the operations of the combined companies. We anticipate that, with this transaction, DoveCorp will generate the volume of business that creates efficiencies of scale. At the same time, this transaction will be good for the employees of both companies as they learn from each others' skills and benefit from the increased brand awareness of the combined company."

About DoveCorp:

DoveCorp is a leader in Canada's drycleaning and laundry industry. For more than 10 years, its flagship Dove Cleaners division has been widely recognized by various fashion and industry magazines as the best premium dry cleaners and laundry in Canada. At the same time, its Dove Depot, Meena Cleaners, and Natural Cleaners divisions excel in the mass market. DoveCorp's newest venture, Dove Cleaners Commercial, is a full service provider of linen, uniforms, and mat rentals. The company also provides out-sourced dry cleaning and laundry services. With scalable technology and proven management, highly efficient operational and quality control systems, and a 42,000-square-foot production facility, DoveCorp believes that it will continue to be an industry consolidator and that it will continue to expand by organic growth. DoveCorp boasts the only ISO 9001 dry cleaning registration in the industry.

About Cadet Cleaners:

For more than 50 years, Cadet Cleaners has been providing quality dry cleaning services to the southern Ontario market. A multiple recipient of the "Consumers' Choice Award" for best dry cleaner of choice, Cadet's 48 franchise and corporate locations stretch from Bowmanville to Burlington and as far north as Barrie. In addition to its premium dry-cleaning, Cadet offers a discount service, Factory Outlet Dry Cleaners, with 19 locations, the chosen dry cleaners of Wal Mart Canada, with 6 outlets in select GTA stores. Cadet's institutional customers include the Metro Police, Toronto Fire Department, EMS Services, Air Canada, IBM, Peel Regional Police, Durham Regional Police, and the TTC.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved of the contents of this release. The TSX Venture Exchange has in no way passed on the merits of the transaction described herein.

Forward-looking statements

This document contains forward-looking statements relating to DoveCorp's financial performance, operations or to the environment in which it operates, which are based on DoveCorp's operations, estimates, forecasts, and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the company's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the company's corporate filings, (posted at Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, DoveCorp cannot be certain that actual results will be consistent with these forward-looking statements, and the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

35 Suntract Road
Toronto, Ontario M9N 2V8

Contact Information

  • DoveCorp Enterprises Inc.
    Sam Mizrahi
    President and CEO
    416-782-8788 x 223
    Ciris Investor Relations
    Robin Sundstrom
    416-368-8770 x 223