HOLT, Mich., Oct. 7, 2003 (PRIMEZONE) -- Proquest Capital Corporation, a Nevada corporation (Pink Sheets:PROQ), announced that it has signed a letter of intent with Paragon Steakhouse Partners, Inc., a debtor-in-possession, to acquire certain assets of 10 Paragon Steakhouse locations, including leasehold interests, liquor licenses and all improvements and FF&E in the restaurants, located in Michigan, Indiana, Ohio and California. Proquest will purchase Paragon out of bankruptcy court in a $650,000 cash deal and will operate the Paragon Steakhouse units under the existing Paragon name for an agreed upon period of time.
Consummation of the acquisition will occur only after execution of a purchase agreement, which has not yet been executed but is being prepared.
More Information About Paragon Steakhouses
The Paragon Steakhouses specialize in complete steak and prime rib meals, and also offer fresh fish and other lunch and dinner dishes. The average dinner check is approximately $26, including alcoholic beverages. Proquest's management believes that Paragon's emphasis on quality service and the limited menu of its restaurants, with its concentration on high-quality USDA choice-graded steaks and prime rib, distinguishes the Steakhouse restaurants from competitors. The Paragon Steakhouses average approximately $1.8 mil. each in annual revenues.
Proquest Chairman and CEO William E. Curtis stated that, "These high-quality Paragon Steakhouse units will at current revenue levels add approximately $18 mil. in annual revenues to Proquest. Based on our long experience with turnaround projects, we know that we can substantially improve the revenue stream of these properties and bring them to profitability by the injection of new capital, bringing in fresh management and controlling overhead. These established units are prime destination restaurants, and we are buying them right. These are exactly the kinds of properties we are looking to buy."
Proquest President Thomas VanAlstine added that, "In addition to the 10 operating units that are being purchased, another 4 closed locations are also available, which we will pursue as well. These additional units could be ramped up and opened comparatively cheaply, since the decor and equipment are already in place. Starting in 2005, we are planning to open two or three new Paragon Steakhouses each year. These premium units will add a necessary counterweight to our fast food operations and give us new stream of predictable revenue."
More Information About Proquest
Proquest operates 44 Hot 'N Now fast food restaurants in Michigan, Wisconsin and Indiana, of which 23 are company owned and 21 are franchised. System-wide 2002 gross sales for the units were approximately $25 million annually. The rapidly growing Hot 'N Now Business currently has over 450 employees, all of which either work for the corporate office or at the operations of the corporate-owned locations. In addition, the franchise locations employ over 300 additional personnel. Each location has approximately 15 employees, including three Managers-in-training and one salaried General Manager.
Proquest is launching an aggressive effort to acquire other restaurant assets that are synergistic with the Hot 'N Now Business. Any such acquisition may be structured as a merger, stock exchange or cash purchase. Proquest will favor companies with strong operating revenues that lend themselves to the establishment of a franchise program or similar means of rapid establishment of a distribution network. Proquest's management has substantial experience in the turnaround of distressed restaurant and food properties and will be looking for sound assets that can be bought cheaply and quickly overhauled to profitability.
Except for the historical information presented, the above statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 or regulations thereunder. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. These risks include the economic health of the restaurant and fast-food industries, competitive pricing pressures, completion of planned acquisitions and success at integrating and operating the acquired operations and the availability of necessary financing. These statements speak only as of above date, and Proquest disclaims any intent or obligation to update them.
HTML: http://newsroom.eworldwire.com/wr/100703/1770.htm PDF: http://newsroom.eworldwire.com/pdf/100703/1770.pdf ONLINE NEWSROOM: http://newsroom.eworldwire.com/1812.htm LOGO: http://newsroom.eworldwire.com/1812.htm