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New Jersey Firm Completes Acquisition of ICEE-USA

May 21, 1988|JAMES S. GRANELLI | Times Staff Writer

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."

FOR THE RECORD
Los Angeles Times Friday May 27, 1988 Orange County Edition Business Part 4 Page 8 Column 5 Financial Desk 2 inches; 40 words Type of Material: Correction
A story in Saturday's Business section understated the total revenues of J&J Snack Foods, the New Jersey company that recently bought ICEE-USA in Anaheim. J&J's sales were $48 million last year. With the acquisition of ICEE, the firm expects sales to reach as much as $70 million this year.

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.

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