A New Jersey specialty foods company that began buying stock in ICEE-USA last year has acquired its remaining shares in a $2.4-million transaction and has turned the Anaheim slush drink maker into one of its subsidiaries.
J&J; Snack Foods Corp. of Pennsauken, N.J., acquired the final 28% of ICEE's shares last week at a special meeting of ICEE shareholders, said Arnold J. Goldstein, J&J; senior vice president and chief financial officer.
The 20-year-old firm will continue to operate from its Anaheim headquarters, Goldstein said.
In a related move, J&J; bought out a 50% partner in an ICEE joint venture called Western Syrup in Santa Fe Springs. The venture made syrups for slush drinks. J&J; paid $670,000 to purchase the interest held by Universal Industries in Aberdeen, Miss.
"What's attractive to us in ICEE is its unique product," Goldstein said. "Most of our products are special-niche situations. For example, we're the largest distributor of soft pretzels in the world."
Many of the two companies' customers are the same--shoppers at such stores as K mart and other chains, he said. ICEE sells its slush drinks at about 1,660 outlets in the Western United States, Canada and Mexico.
J&J; acquired a 43.3% stake in the firm last May when it bought the holdings of ICEE's major shareholder and chairman, A. Walter Rognlien.
Rognlien and his Runglin Co., a Los Angeles investment firm he named after the phonetic pronunciation of his name, sold the 38% ICEE stake to J&J; for $5 a share, or a total of nearly $3 million.
J&J; continued to buy stock through February, when its stake reached 72%.
At a May 11 meeting, ICEE's remaining shareholders agreed to swap their 439,000 shares for 134,000 shares of J&J; stock, a ratio of 3.28 shares of ICEE for one share of J&J.;
In the first nine months last year, ICEE lost $2 million because J&J; required it to write down the value of "soft" assets, mainly territorial distribution rights for Canada and Mexico that were being carried on ICEE's books for about $2 million.
Without the write-downs, ICEE would have posted a $300,000 profit, Goldstein said.
J&J;, with sales of about $20 million a year, makes frozen and soft pretzels, frozen juice bars, frozen Latino specialty pastry and whipped fruit drinks. ICEE's annual sales are about $15 million.