Somerset-based food company J&J Snack Foods Corp. will acquire theme park favorite Dippin’ Dots LLC for $222 million, per a definitive agreement announced May 19.
The transaction will be funded through a combination of cash and senior debt financing and is expected to be accretive to J&J’s annual operating results. It is anticipated to close by the end of June, subject to customary closing conditions.
“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 J&J Snack Foods President and Chief Executive Officer Dan Fachner. “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.”
In 1988, microbiologist Curt Jones used his knowledge of cryogenic technology to invent Dippin’ Dots, the world’s first beaded ice cream. Since then, it’s become a favored snack at amusement parks and malls, and today the company sells its products through national accounts, local accounts and a franchise network with over 140 franchisees.
Dippin’ Dots is headquartered in Paducah, Ky., which is also home to its main production facility, warehousing, distribution and administrative offices. The company leases four additional frozen warehouses in California, Canada, Australia and China.
Acquiring Dippin’ Dots is “an opportunity to acquire a company that aligns with our focus on accelerating growth while delivering incremental shareholder value,” said J&J Snack Foods Chief Financial Officer Ken Plunk. “Financially, we are leveraging our strong balance sheet and healthy liquidity position to acquire a profitable and scalable business that complements our long-term growth strategy.”
Plunk expects the transaction to be accretive to J&J’s Earnings per Diluted Share between $0.30 and $0.40 per share in the first year after closing. This acquisition, he noted, also provides significant tax benefits.
“The Dippin’ Dots team is thrilled to be joining the J&J Snack Foods family. As a leader in the snack industry with a number of iconic brands and a strong record of product innovation, we believe J&J Snacks Foods is well-positioned to leverage our unique offering in the market and improve and grow the business going forward,” said Dippin’ Dots CEO Scott Fischer.