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McCullagh Coffee plans $2 million acquisition of Premium Coffee Roasters

Buffalo coffee roaster S.J. McCullagh Coffee is planning a $2 million deal to acquire Premium Coffee Roasters, which runs a roasting facility and store in Lackawanna and a smaller site in Olean.

The acquisition would save about half of the 25 jobs at Premium Coffee Roasters in Lackawanna and its sister company, Speroni’s Premium Coffee, in Olean. In all, McCullagh expects to keep 12 customer sales associates and service technician jobs at Premium Coffee Roasters in Lackawanna. Together, those two businesses have annual sales of about $3.2 million.

McCullagh executives said the deal would help the company consolidate its market share in upstate New York and western Pennsylvania, while also making its operations more cost effective.

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To finance the deal, McCullagh is seeking a $1 million loan from First Niagara Bank along with a loan from the seller and an equity stake from the company’s owners, Warren Emblidge Jr. and Carol Emblidge.

McCullagh also is seeking a $500,000 low-interest loan from the Erie County Industrial Development Agency’s Regional Development Corp. affiliate. That loan had been expected to be approved at the agency’s meeting on Wednesday but was delayed until next month because too few RDC board members attended the meeting to achieve a quorum.

McCullagh, founded in 1867, was acquired by the Emblidge family in 1986. The company makes more than 30 blends of coffee that it sells to more than 2,000 clients, from restaurants, hotels and hospitals to private label customers that include Walmart Stores, Office Max and United Refining’s Kwik-Fill convenience stores.

Premium Coffee Roasters, owned by James Demarco, was launched in 1993 and runs a roasting facility and store on Route 5 in Lackawanna. It also has a small distribution site in Olean. Demarco has been considering other purchase offers from companies outside Erie County and New York. IDA officials said it was “very likely” that Premium Coffee Roasters’ employees would lose their jobs if the McCullagh deal does not go through.

email: drobinson@buffnews.com

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