UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
August 28, 1998
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(Date of earliest event reported)
Commission File Number: 0-18201
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EQUIVEST FINANCE, INC.
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(Exact name of Registrant as specified in its charter)
Florida 59-2346270
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
2 CLINTON SQUARE, SYRACUSE, NEW YORK 13202
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (315) 422-9088
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Item 5. Other Events
PRESS RELEASE
Equivest Finance, Inc.
Announces Completion of Acquisition of Eastern Resorts Corporation
Syracuse, New York, August 28, 1998. Equivest Finance, Inc.
(NASD-EQUI) today announced that it had completed the previously announced
acquisition of Eastern Resorts Corporation of Newport, Rhode Island, one of the
largest developers of timeshare resorts in New England. As a result of the
acquisition, Eastern Resorts became a wholly-owned subsidiary of Equivest and
the outstanding common stock of Eastern Resorts was exchanged for $15 million in
cash and 3.2 million shares of common stock of Equivest. Equivest financed the
cash portion of the purchase price through a short-term bridge loan from Credit
Suisse First Boston Mortgage Capital LLC, which received a warrant exercisable
for 180,000 shares of the common stock of Equivest at a price of $8.00 per
share.
Eastern Resorts was founded by Mr. R. Perry Harris in 1981. It
developed, and continues to manage, six vacation resorts in Rhode Island and
Massachusetts, with a seventh resort currently in construction in Westen,
Massachusetts. Eastern Resorts sells and finances timeshare interests in
individual vacation units for the properties under its management. During the
seven month period ending July 31, 1998, Eastern Resorts had total revenues of
approximately $14,987,433 and pretax earnings of $2.3 million. Mr. Harris will
continue to serve as Chief Executive Officer of Eastern Resorts under a
long-term employment contract. He will also join the Board of Directors of
Equivest. The senior management team of Eastern Resorts has substantial
experience within the timeshare industry, and on average, significant tenure
with Eastern Resorts, which is expected to continue.
The acquisition of Eastern Resorts is expected to complement the
activities of Equivest's wholly-owned subsidiary Resort Funding, Inc., which
specializes in financing the development of destination resorts in the timeshare
industry, as well as the purchase of vacation ownership intervals bought by
consumers in timeshare resorts. Through Resort Funding, Equivest is actively
financing resorts throughout the United States and in selected foreign markets.
Equivest believes that the Eastern Resorts' acquisition enhances the Company's
comprehensive approach to serving both developers and consumers in the
vacation/leisure industry. It also provides Resort Funding a core base of
receivables financing volume. "This acquisition is a major step in broadening
Equivest's market and diversifying its revenue base. We are very pleased to have
completed the merger and look forward to building on the excellent record of
Eastern Resorts. We are particularly pleased to have joined forces with the
superb group of employees at Eastern Resorts" said Richard C. Breeden, Chairman
and Chief Executive Officer of Equivest.
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Certain statements (including without limitation the statements
concerning the merger and the operation of the combined companies after the
consummation of the merger) contained in this press release are forward-looking.
These may be identified by the use of forward-looking words or phrases such as
"believe," "expect," "anticipate," "should," "planned," "estimated," and
"potential." These forward-looking statements are based on Equivest's current
expectations. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for such forward-looking statements. In order to comply with the
terms of the safe harbor, Equivest notes that a variety of factors could cause
actual results and experience to differ materially from the anticipated results
or other expectations expressed in such forward-looking statements. Factors
affecting the plans and potential results and operations of Equivest and Eastern
Resorts as combined companies, as well as the risks and uncertainties that may
affect the operations, performance, development, and results of Equivest's and
Eastern Resorts' businesses, include the ability of the two companies to
successfully integrate their operations, a downturn in the real estate cycle or
other factors which result in lower sales of vacation ownership interests,
possible financial difficulties of one or more of the developers with whom
Equivest does business, such as the risk of carrying non-performing assets or
losses if defaulted loans prove to have insufficient collateral backing,
fluctuations in interest rates, prepayments by consumers of indebtedness,
prepayments by developers, inability of developers to honor replacement
obligations for defaulted consumer notes, and competition from organizations
with greater financial resources.
Contact: Ben Cesare of Cohn & Wolfe (212) 598-3651