NexCen Brands buys MaggieMoo's and Marble Slab
February 15, 2007
by FoodBusinessNews.net Staff
NEW YORK — NexCen Brands, Inc., a brand acquisition and management company, entered into a definitive agreement to acquire MaggieMoo’s International, L.L.C. and the assets of Marble Slab Creamery, Inc. for a combined initial price of $37.1 million. The transactions are expected to be completed by the end of the first quarter.
For fiscal year 2006, MaggieMoo’s and Marble Slab reported aggregate earnings of approximately $10 million. In 2007, NexCen anticipates that aggregate earnings will grow approximately 20%.
The acquisition represents NexCen’s first in the quick-service restaurant sector, and the company has plans to grow the brands both in the U.S. and internationally.
"These acquisitions will provide NexCen with two well-positioned brands in the hand-mixed premium ice cream category," said Robert W. D’Loren, president and chief executive officer of NexCen. "With 520 existing stores and 225 stores in the pipeline on a combined basis, these two brands will place us solidly as the No. 1 player in quality and the No. 2 player in the number of franchise units in the hand-mixed premium ice cream sector.
"There is a tremendous growth opportunity with these brands through organic growth and licensing opportunities. We intend to grow these brands outside of the United States through our international franchise network currently operating in over 40 countries worldwide."
The initial purchase price for MaggieMoo's of $16.1 million consists of approximately $10.8 million of cash and $5.3 million in NexCen common stock. NexCen also has agreed to an earn-out arrangement that will entitle the sellers of MaggieMoo’s to receive an additional amount of up to $2 million, approximately 10% of which will be payable in cash and the remainder in cash or stock priced at the time of issuance, at NexCen's option. The additional amount will be payable if recurring royalties and non- recurring franchise fees for 2007 meet performance targets specified in the acquisition agreement.
In the separate Marble Slab acquisition, the purchase price consists of $16 million of cash, and seller notes in aggregate principal amount of $5 million that earn interest at 6% per annum and are payable one year from closing.