Poore Brothers Announces Letter of Intent to Acquire Mrs. Fields Brand Licenses
October 27 2005 - 6:45AM
Business Wire
Poore Brothers, Inc. (Nasdaq: SNAK) today announced the signing of
a non-binding Letter of Intent to acquire certain assets and
liabilities of Shadewell Grove Foods, Inc., and Shadewell Grove IP,
LLC (collectively "Shadewell") including the Mrs. Field's(R)
licenses to produce and sell ready-to-eat cookies, baking chips,
brownies and toppings through grocery, drug, club, mass and
convenience store channels. The Letter of Intent is non-binding,
and there can be no assurance that the acquisition will be
completed or that it will be completed on the terms and conditions
contained in the Letter of Intent. Mr. Thomas W. Freeze, President
and Chief Executive Officer, commented, "We believe this is an
excellent fit with our strategic plan because the Mrs. Field's(R)
brand is nationally recognized for quality cookie products and
there are many business synergy opportunities. Shadewell currently
sells its products in many of the same distribution channels that
we do and they sell in several countries internationally. Shadewell
utilizes excellent co-packers to make their products and our goal
is to combine warehousing and distribution for added efficiency
gains. We believe that this acquisition would be accretive after
the initial integration phase." The Mrs. Field's(R) licenses are
currently the subject of litigation in the Delaware Chancery Court
between Shadewell and Mrs. Fields, and the closing of the
acquisition is intended to be conditioned upon the Company's
satisfaction with matters relating to the litigation. The Company
is not a party to the pending legal matters. Completion of the
acquisition is also subject to the signing of a definitive purchase
agreement, completion of the financing for the transaction and
fulfillment of other closing conditions to be contained in the
definitive purchase agreement. A closing is planned within thirty
days. The Company is purchasing agreed upon assets and liabilities,
including the Mrs. Fields(R) licenses and certain tangible assets
consisting principally of inventory and accounts receivables with
minimal fixed assets. The purchase price consists of $3 million at
closing and a note for $22 million. The principal amount of the
note is subject to reduction to the extent gross revenue levels in
2005 for the acquired business are less than $44 million and
working capital for the acquired business at the closing date is
less than $2 million. The Company's obligation to pay the note is
entirely contingent on a satisfactory resolution of pending legal
matters relating to the Mrs. Fields(R) licenses, which could come
after closing. The Company plans to finance this acquisition with
existing cash and new bank debt. About Poore Brothers, Inc. With
facilities in Indiana and Arizona, Poore Brothers is a marketer and
manufacturer of Intensely Different(TM) snack foods under a variety
of owned or licensed brand names, including T.G.I. Friday's(R),
Cinnabon(R), Tato Skins(R), Poore Brothers(R), Bob's Texas
Style(R), and Boulder Canyon Natural Foods(TM). For further
information about Poore Brothers or this release, please contact
Richard M. Finkbeiner, Senior Vice President and Chief Financial
Officer, at (623) 932-6255, or logon to
http://www.poorebrothers.com. Statements contained in this press
release that are not historical facts are forward looking
statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Because such statements include
risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that may cause actual results to differ from the
forward-looking statements contained in this press release include,
but are not limited to the failure to negotiate a definitive
agreement on mutually acceptable terms, the failure to obtain
favorable resolution of certain legal matters relating to the Mrs.
Fields(R) licenses, and the failure to successfully integrate
operations of the acquired business with the Company's business,
and factors that may affect the Company's prospects in general
include, but are not limited to, the potential need for additional
financing, acquisition-related risks, significant competition,
customer acceptance of new products, dependence upon major
customers, dependence upon existing and future license agreements,
general risks related to the food products industry, and such other
factors as are described in the Company's filings with the
Securities and Exchange Commission.
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