SOURCE: U.S. Dry Cleaning

September 11, 2007 07:00 ET

U.S. Dry Cleaning Corporation Agrees to Acquire #1 Dry Cleaning Business in California's Central Valley, Adding Over $6.5 Million to the Company's Annualized Run Rate

PALM SPRINGS, CA--(Marketwire - September 11, 2007) - U.S. Dry Cleaning Corporation (OTCBB: UDRY) ("U.S. Dry Cleaning"), the first mover in consolidating the nation's dry cleaning industry, announced today that it has signed a purchase agreement to acquire the market-leading dry cleaning business based in Fresno, California, comprising 18 stores in and around Fresno and 2 stores in Arizona.

The acquisition would add more than $6.5 million to U.S. Dry Cleaning's existing $10 million annualized run rate. Under the purchase agreement, U.S. Dry Cleaning would acquire the business for $6,134,000, half of which would be paid in the form of shares of U.S. Dry Cleaning common stock.

The transaction includes four affiliated companies owned and operated for two generations by Fred Jones and his son Tom, with daughter Melinda Brooke operating the stores in Phoenix and Tempe, Arizona. The businesses are Team Enterprises, Inc., Bell Hop Cleaners of California, Inc., Team Equipment, Inc. and Fabricare Services, Inc.

Operating under the trade names One Hour Martinizing and Regency Cleaners, the chain has created a large base of loyal customers served by an efficient infrastructure of office, management, training and operations staffs. In addition, the business has proactively embraced the environmentally friendly Green Earth cleaning process.

Robert Y. Lee, CEO of U.S. Dry Cleaning, said, "We are extremely pleased and proud to join forces with this strong profitable company. This is a significant financial and strategic addition to our corporation, bringing our annualized run rate to just under $17 million, nearly triple that of 2006. The Jones family has been a very astute and responsible steward of their business. We are delighted that Tom Jones has agreed to stay on for three years to help build the market, increase revenue and profitability, and integrate the company into U.S. Dry Cleaning's national strategy. We intend to rapidly become the country's premier dry cleaning chain, benefiting our employees and communities through outstanding service and providing the opportunity to participate in the growth of a public company."

Tom Jones stated, "My family and I are very pleased to join U.S. Dry Cleaning in creating the first national chain of premier dry cleaning businesses in the United States. We believe that, with the added corporate resources provided by U.S. Dry Cleaning Corporation, our company can take full advantage of the rapid residential and business expansion in this region and will continue to be number one in a large and growing market. In addition, U.S. Dry Cleaning's strategy will provide a new level of service and responsibility to our community and new opportunities for our employees."

It is expected that the acquisition will be completed before the end of October 2007, following customary closing conditions.

About U.S. Dry Cleaning Corporation

U.S. Dry Cleaning Corporation's mission is to create the premier national chain in the dry cleaning industry. Over the last year and half, U.S. Dry Cleaning has completed acquisitions with combined annual revenues of over $9 million. U.S. Dry Cleaning combines a management team with extensive experience in retail consolidations and premier dry cleaning operations, with a proven operating model.

U.S. Dry Cleaning intends to rapidly acquire profitable, positive cash flow operations at accretive valuations. Each acquisition target is expected to be self-sufficient and field management is expected to remain in place to ease the assimilation. U.S. Dry Cleaning is focused on acquiring profitable businesses that hold a leading share in their individual markets.

U.S. Dry Cleaning management believes that the current absence of extensive competition to acquire the larger dominant operators will change as the industry consolidates. Management believes that the greatest value achieved in any consolidation occurs during the earliest phases and intends to grow as rapidly as possible to deliver shareholder value.

This release is provided for informational purposes only and should not be construed as a solicitation to invest. U.S. Dry Cleaning Corporation's future operation results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) the Company's ability to build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at http://www.sec.gov/ under "Search for Company Filings."

In accordance with a December 5, 2006 agreement, Consulting For Strategic Growth 1, Ltd. ("CFSG1") provides U.S. Dry Cleaning Corporation ("the Company") with consulting, business advisory, investor relations, public relations and corporate development services. CFSG1 receives only restricted stock as compensation from the Company. CFSG1 may also choose to purchase the Company's common stock and thereafter liquidate those securities at any time it deems appropriate to do so. For more information please visit www.cfsg1.com.

Contact Information

  • Company Contact:
    Rick Johnston
    Director of Shareholder Communications
    Tel: 760-668-1274
    Email: Email Contact
    www.usdrycleaning.com

    Investor Relations:
    Stanley Wunderlich
    CEO
    Consulting For Strategic Growth 1
    Tel: 800-625-2236
    Fax: 212-337-8089
    Email: Email Contact
    Web site: www.cfsg1.com

    Media Relations:
    Daniel Stepanek
    Consulting For Strategic Growth 1
    Tel: 212-896-1202
    Fax: 212-697-0910
    Email: Email Contact