CoolBrands Sells its Franchise Division
Thursday December 22, 5:38 pm ET
TORONTO, Dec. 22 /CNW/ - CoolBrands International Inc. ("CoolBrands") (TSX: COB.SV.A - News) today announced that its board of directors has approved the sale of substantially all of its franchising division to International Franchise Corp. for cash consideration of US$8 million. Definitive agreements in respect of the transaction are expected to be completed, and the transaction closed, prior to the end of this month.
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 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 pre-packaged consumer products division, yogurt division, foodservice division and dairy components division. 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 Mr. 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 board of directors of CoolBrands 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 directors 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 who acted as exclusive financial advisor to CoolBrands and who 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, Chief Executive Officer and Co-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."
Mr. Aaron Serruya will remain on the board of directors of CoolBrands, but following completion of the transaction will no longer be an executive officer of CoolBrands |
