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HERCO TO SELL HM&C INSTITUTIONAL LINE TO FEESERS

 HERSHEY, Pa., July 26 /PRNewswire/ -- HERCO Inc. (HERCO) announced today it has entered into an agreement in principle to transfer the institutional food distribution line of its Hershey Meats & Commissary (HM&C) operation to Feesers Inc. (Feesers), Harrisburg, Pa. In keeping with HERCO policy, financial terms of the transaction will not be disclosed.
 Under the agreement, Feesers will purchase, in addition to the inventory, the bulk of HM&C trucking fleet and various pieces of equipment from HERCO. In addition, Feesers will acquire HM&C's customer lists from the institutional side of the HM&C operation. Institutional accounts include restaurants, high schools, colleges, universities, and various state and federal facilities and institutions.
 Also, as a major part of the transaction, Feesers will become a primary and substantial contract supplier of food and food-related products to all of HERCO's core operations in Hershey, including Hersheypark, Hersheypark Arena/Stadium, the Hotel Hershey, Hershey Lodge & Convention Center and the Hershey Country Club. The food supply contract runs through the year 1996.
 "The sale of the institutional side of the HM&C operation is extremely positive for HERCO in a number of ways," noted J. Bruce McKinney, chief executive officer and chairman of the board, HERCO. "First, it enables us to continue to meet our stated business objective of divesting all assets not directly related to our core entertainment and resort operations in Hershey," McKinney stated. "Second," he continued, "by selling the business line to Feesers we have been able to ensure ourselves of a continuation by Feesers of the outstanding commitment to the very finest in service, quality and price which had consistently been offered to our internal operations by the dedicated staff at HM&C."
 "In short, we have sold a valuable asset without compromising the needs of our entertainment and resort properties," McKinney concluded.
 HERCO noted that Feesers will not be purchasing the 38,000-square- foot HM&C warehouse facility, located at 200 E. Hersheypark Drive, Hershey, or the real estate comprising the operation. Feesers intends to service its new and existing accounts from its 200,000-square-foot, modern warehouse facility at 5561 Grayson Road, Harrisburg.
 With regard to the ultimate disposition of the HM&C land and physical facility, HERCO stated that negotiations continue with a number of interested parties for acquisition of the property. However, as has been its routine practice, HERCO will not reveal the identity of interested parties pending the completion of negotiations.
 As a result of today's transaction, HERCO will cease operations at HM&C on Sept. 6. In the meantime, business will continue as usual at the facility and uninterrupted service will continue to all of HM&C's existing customers and accounts.
 "We expect business to continue as usual at HM&C while we implement an orderly and business-like transition designed to effectuate both a transfer of the institutional line and certain resources to Feesers, as well as a cessation of operations by HERCO on September 6," said McKinney.
 The sale of the institutional part of the HM&C business line and the formal closing of operations on Sept. 6 will mark the second divestiture of a HERCO commercial group property within the past 30 days. HERCO announced on July 9, that it had leased the retail garden center at the Hershey Nursery to Royers Garden Center & Greenhouse, Inc., effective July 16, but that HERCO would continue to own and operate the landscaping and grounds maintenance operations of the Nursery.
 HERCO began operating HM&C at its East Hersheypark Drive location in 1980. The full-service food distribution company currently employs 43 full-time and five part-time employees. While the dedicated and enthusiastic staff and management team made HM&C one of the finest facilities of its kind in the industry, HERCO identified the warehouse and distribution business for divestiture in its existing business plan which calls for the company to focus on its core entertainment and resort facilities in Derry Township, including Hersheypark, the Hotel Hershey and the Hershey Lodge & Convention Center, among others.
 Hershey and Hersheypark are trademarks used under license.
 /delval/
 -0- 7/26/93
 /CONTACT: Jay H. Feaster of HERCO, 717-534-3143/


CO: HERCO Inc.; Hershey Meats & Commissary; Feesers Inc. ST: Pennsylvania IN: FOD SU:

MJ-CC -- PH019 -- 5775 07/26/93 14:33 EDT
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Publication:PR Newswire
Date:Jul 26, 1993
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