PENNSAUKEN, NJ — J&J Snack Foods Corp. has entered into an agreement to acquire Dippin’ Dots, LLC for $222 million, subject to customary purchase price adjustments. The transaction is expected to close by the end of June.
Headquartered in Paducah, Ky., Dippin’ Dots uses a cryogenic freezing process to produce beaded ice cream, yogurt, sherbet and flavored ice products distributed in thousands of franchise locations, theme parks, stadiums, arenas, zoos, movie theaters and events. The company has a main production facility, warehousing, distribution and administrative offices in Paducah and leases four additional warehouses in California, Canada, Australia and China.
“Dippin’ Dots aligns perfectly with J&J’s portfolio strategy by adding an iconic, differentiated brand that uniquely complements our frozen novelty and frozen beverage businesses,” said Dan Fachner, president and chief executive officer of J&J Snack Foods. “With this acquisition, we can further leverage our combined strength in entertainment and amusement locations, theaters, convenience and supermarkets to realize added scale, operational and go-to-market synergies and create new selling opportunities among an expanded customer base. We are confident this transaction further positions us for accelerated growth across our business.”
The transaction will be funded through a combination of cash and senior debt financing and is expected to be accretive to earnings per diluted share in the range of 30¢ to 40¢ per share in the first 12 months after closing, said Ken Plunk, chief financial officer of J&J Snack Foods.
“This acquisition also provides significant tax benefits contributing to an even more attractive overall valuation,” Plunk said.
Throughout its history, J&J Snack Foods has completed more than 30 acquisitions and has a long-term track record of integrating and scaling brands, including Icee, SuperPretzel, Luigis and others, Fachner said.
“As a part of J&J, we will have the opportunity to leverage our marketing and innovation capabilities to promote Dippin’ Dots and expand distribution into new markets while implementing initiatives to gain added operating efficiencies,” he said.