Case Study

Overview

• Bubbies Homemade Ice Cream and Desserts is the leading U.S. manufacturer of premium mochi ice cream
• The Company was founder-led for the past 30 years during which time it had helped to pioneer the mochi ice cream category and developed a national and international customer base, including a large natural channel presence at Whole Foods Market
• The founder personally oversaw all aspects of the business resulting in a company which was highly profitable (in part due to low SG&A expenses), but lacked a deep “bench” of management strength

Situation

• After spending 30 years building and running his business, the founder and CEO desired to sell 100% of the Company and retire
• At the same time, the Company was undergoing a meaningful growth phase and needed to institutionalize processes and invest in the team and infrastructure to support aggressive expansion
• The founder had been approached by interested buyers in the past, but had very high valuation expectations given the strong brand, exceptional product, and favorable growth prospects for the business, but did not want to roll equity and was not able to complete a transaction

Cascadia Process

• Cascadia was engaged to find a buyer and ran a targeted dual-path process (both strategic and select consumer-oriented private equity firms) that positioned the Company as a “super-premium” specialty product with significant growth potential
• The process yielded multiples offers and ultimately Bubbies was acquired by Kenex Holdings which put forth a structure that met all of the founder’s goals and achieved a purchase price of approximately 2.5x revenue
• Cascadia structured an extended confirmatory diligence process which enabled the acquirer to build out a complete management team in advance of closing, ensuring a smooth transition
• The founder received 93% of the consideration in cash and was able to fully depart from day-to-to operations of the business within three months of closing