MARKHAM, Ontario -- CoolBrands International Inc. said its board has approved the sale of substantially all of its franchising division to International Franchise Corp. for cash consideration of $8 million (U.S.). Definitive agreements in respect of the transaction are expected to be completed, and the transaction closed, before the end of December.
The portion of the franchise division being sold operates by franchising and licensing retail outlets serving primarily frozen yogurt and ice cream under the Bresler's, I Can't Believe It's Yogurt, Ice Cream [image-nocss] Churn, Swensen's, and Yogen Fruz trademarks. Following closing of the transaction, CoolBrands will continue to operate as franchisor of retail outlets under the Jerry Tucci's Pizza Pasta and Tropicana Smoothies trademarks.
The sale of the franchising division will allow CoolBrands to focus its resources in its prepackaged consumer products division, yogurt division, foodservice division and dairy components division, it said. A portion of the proceeds from the sale will be used to repay short term borrowings and the balance will be used for general working capital requirements of CoolBrands.
International Franchise Corp. is a company controlled by Aaron Serruya, a director of CoolBrands and the senior executive responsible for the franchising division at CoolBrands. The sale transaction was reviewed and unanimously recommended to the CoolBrands board by a committee of independent directors of CoolBrands, consisting of Robert E. Baker, Romeo De Gasperis and Arthur Waldbaum, and was unanimously approved by the board of CoolBrands. As part of their review of the transaction, the independent committee and the board of directors received a fairness opinion from Duff & Phelps LLC, which acted as exclusive financial advisor to CoolBrands and which assisted CoolBrands in marketing the division to potential buyers.
Divesting our franchise business will enhance the company's ability to implement its plans and strategies in its core business segments, said David J. Stein, president, CEO and c-chairman of CoolBrands International Inc. We believe that International Franchise Corp., under the leadership of Aaron Serruya, is committed to providing the focus, energy and imagination to help move the franchise system forward in the years to come.
Aaron Serruya will remain on the CoolBrands board, but following completion of the transaction, will no longer be an executive officer of CoolBrands.
CoolBrands, Markham, Ontario, markets dairy-based snacks in the refrigerated and frozen snack foods categories. In frozen snack foods, it manufactures and distributes such brands as Godiva Ice Cream, Whole Fruit Sorbet, Eskimo Pie frozen snacks, Tropicana Fruit Bars, Chipwich Ice Cream Cookie Sandwiches and many others. In refrigerated dairy, it manufactures and distributes Breyer's Yogurt and Cr ame Savers Yogurt. CoolBrands operates a direct-store delivery (DSD) ice cream distribution system in selected U.S. markets, serving CoolBrands products and partner brands to supermarkets, convenience stores and other retail customers. CoolBrands' 50.1%-owned subsidiary, Americana Foods, is a U.S. manufacturer and supplier of soft-serve mixes, packaged ice cream, frozen yogurt and sorbet products, frozen snacks and other food products to national retailers, food companies and restaurant chains. CoolBrands' Foodservice Division manufactures and sells soft-serve ice cream and frozen yogurt to the foodservice industry. CoolBrands' Dairy Components Division manufactures and sells a line of flavors, chocolate coatings, fudge sauces, powders for chocolate milk, egg nog bases and other ingredients and flexible packaging products for use in private-label dairy products.
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