The Pink Sheets frozen yogurt company, YoCream International, will merge with the EPA-listed Danone. The Paris, France company is expected to serve up $39.82 per share in cash for YoCream, representing an enterprise value of $103 million.
YoCream’s board approved the transaction and recommends that all YoCream shareholders vote their shares to approve the merger. The deal is expected to close before the end of the year.
Deal terms also stated that if the closing does not occur by the end of the year because of failure to obtain the required regulatory clearances, YoCream shareholders will receive an additional $0.97 per share if capital gains tax rates are higher on April 15, 2011, than they were on December 31, 2010.
YoCreams’s co-founder and CEO, John Hanna, will continue to lead the business along with its current senior management team under its original name. A former board member as well as the management team will maintain an ownership interest of approximately 5% in the company after the deal is complete.
The Portland, Oregon-based company started producing frozen yogurt, fruit-based frozen desserts and beverages in 1977. Paulson Investment Company took interest in the company and then lead the company to trade on the NASDAQ in 1987, said Terry Lusetti, YoCream’s spokesman.
The hefty fees that came along side the Sarbanes Oxley Act of 2002 caused the company to de-list in 2006. YoCream then maxed out its credit lines and borrowed up to $7 million which it spent on equipment and enhancing its manufacturing plants, said Lusetti.
The company has since grown to serve 110 flavors of frozen yogurt, ice cream, frozen custard, sorbet, smoothies, frozen carbonated beverages, and frozen drink mixes. YoCream provides private label to the frozen yogurt chain, Red Mango.
The YoCream brand also holds exclusive licenses of other branded flavors such as Hershey’s and Rockstar.
The company sells its frozen yogurt products in 17 countries which represents approximately 4% of the company’s net sales for 2010. Sales are estimated at approximately $58 million. Luestti said with Danone as its new owners the company will expand its product offering internationally throughout Asia and Europe.
D.A. Davidson & Co. provided financial advice to YoCream with Daren Shaw as the lead. Ater Wynne LLP provided legal advice for securities to YoCream and Hanna Strada LLP provided M&A legal advice.