Why J&J Snack Foods (JJSF) Is Buying Dippin’ Dots For $222 Million

By Amit Chowdhry ● May 19, 2022
  • J&J Snack Foods Corp. (NASDAQ: JJSF) has announced it entered into an agreement to buy Dippin’ Dots, L.L.C. for $222 million. This is why.

J&J Snack Foods Corp. (NASDAQ: JJSF) announced that it has entered into a definitive agreement to acquire Dippin’ Dots, L.L.C., a leading producer of flash-frozen beaded ice cream treats, for $222 million, subject to customary purchase price adjustments. The deal 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 and is anticipated to close by the end of June 2022, subject to customary closing conditions.

An ice cream industry pioneer, Dippin’ Dots utilizes an innovative and patented cryogenic freezing process to create unique “beaded” ice cream, yogurt, sherbet, and flavored ice products enjoyed by millions of consumers. And the company sells its products through national accounts, local accounts, and a franchise network with over 140 franchisees. 

Dippin’ Dots is based in Paducah, KY, along with a main production facility, warehousing, distribution, and administrative offices. And the company also leases four additional frozen warehouses strategically located in California, Canada, Australia, and China.

KEY QUOTES:

“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. 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.”

“J&J Snack Foods has completed over 30 value-building transactions throughout the Company’s history, and we have a proven, long-term track record of successfully integrating and scaling niche brands including ICEE, SuperPretzel, Luigis and others. 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.”

— Dan Fachner, J&J Snack Foods President and Chief Executive Officer

“Dippin’ Dots presents an opportunity to acquire a company that aligns with our focus on accelerating growth while delivering incremental shareholder value. 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. We expect this transaction to be accretive to our Earnings per Diluted Share in the range of $0.30 to $0.40 per share in the first 12 months after closing. This acquisition also provides significant tax benefits contributing to an even more attractive overall valuation.”

— Ken Plunk, J&J Snack Foods Chief Financial Officer

“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.”

— Scott Fischer, CEO of Dippin’ Dots

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.