SHANGHAI - Acorn International, Inc. (NYSE: ATV) says it entered a deal to handle furnishings and materials purchases for Cachet Hotel Group, an international hospitality branding and management company.
Both firms are part of the Roche Enterprises Limited group of companies owned by Acorn's Executive Chairman, Robert Roche, Executive Chairman and the majority shareholder of Cachet. Both are based in China, but Cachet Hotel opened a flagship New York City location this month, and has six other locations operating in the U.S., and five more under development. The 105-room Cachet Boutique NYC offers rooms and suites that include custom-crafted furnishings by designer Jay Godfrey.
Jacob A. Fisch, Acorn's Chief Executive Officer is a shareholder and member of the Board of Directors of Cachet. This Strategic Cooperation Framework Agreement is part of Acorn's growth strategy to leverage its affiliate connections and, to the extent possible, build a stronger relationship with its fellow Roche Enterprises Limited portfolio companies.
Acorn will become Cachet's preferred supplier for sourcing of all amenities, textiles, other hotel goods as well as various furniture, fixtures and equipment for the hotels, restaurants, clubs and other types of properties managed by Cachet, subject to Acorn's ability to procure the products satisfying Cachet's requirements on commercially reasonable terms. Best efforts will be used to ensure that the owners of these properties purchase their products from Acorn.
"Acorn's relationship with Roche Enterprises Ltd. is a great asset for the firm, providing opportunities to leverage our existing procurement capabilities and expand into new markets such as the hospitality industry through Cachet Hotel Group," said Jacob A. Fisch, CEO and President of Acorn. "This agreement solidifies our relationship and opens the door for us to expand into several other areas and take advantage of increasing opportunities within the Roche Enterprises Limited network of companies.
The deal also provides a credit facility for Acorn to loan to Cachet up to $10 million at an interest rate of 8 percent and 10 percent for amounts borrowed in RMB, with each drawdown subject to Acorn's consent in its sole and absolute discretion. Cachet's repayment of all loans under the credit facility are personally guaranteed by Roche. As of September 30, 2017, Acorn had approximately $23 million in cash and equivalents earning standard bank interest rates.
Cachet Hospitality Group is a global hospitality branding, design and management company with an expanding portfolio of premier hotel, food, beverage and nightlife brands in the Americas, Greater China and South-East Asia. Its newest property, Cachet Boutique NYC, marks Cachet's exciting entry into the US market in 2017, with established properties operating in Shanghai, Kunming, Phuket, Cabo San Lucas. CHG has a confirmed pipeline in Utah, Shaoxing, Baoji, Wuhan, Chengdu and Bangkok and additional development in Cabo San Lucas. CHG has offices in Shanghai, Bangkok and Los Angeles.
Roche Enterprises invests in a broad range of industry sectors, including consumer (products, media, and branding), hospitality, real estate, financial, energy, and logistics. Specializing in the U.S., Japan and China markets spanning the Asia-Pacific region, it was founded by Robert W. Roche, its Chairman. Through Roche Enterprises and his other companies, Roche has helped create, fund or manage more than 40 companies that have generated more than $1 billion in enterprise value.
Co-founded in 1998 by Executive Chairman Robert Roche, Acorn is a marketing and branding company in China with a proven track record of developing, promoting and selling a diverse portfolio of proprietary-branded products, as well as well-established and promising new products from third parties. Its business is currently comprised of two main divisions, its direct sales platforms and its nationwide distribution network.
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