U-Swirl Inc., parent to U-SWIRL International Inc., the owner and franchisor of U-SWIRL Frozen Yogurt cafés, announces that it has acquired specific assets of Aspen Leaf Yogurt LLC, a subsidiary of Rocky Mountain Chocolate Factory Inc., as well as the Yogurtini frozen yogurt franchise chain.
The acquisition includes all intellectual property and worldwide franchise rights for a total of 46 operating locations comprising 40 franchise locations and 6 corporate locations. Multiple units are in some phase of development. Under the terms of the acquisition agreement, Rocky Mountain Chocolate Factory becomes the majority shareholder in U-Swirl Inc., and the current U-Swirl management will continue to run day to day operations. As a result of this acquisition, U-Swirl has almost tripled the size of its store base, with over 75 stores now operating in 23 states.
Rico Conte, chief executive officer, states, "We are delighted to have partnered with Rocky Mountain Chocolate Factory on this acquisition and see them as a valued member of the U-Swirl team. They will play an important role in our plan to execute on an accretive acquisition strategy moving forward. The immediate elimination of duplicative costs, combined with the potential for increased savings and rebates from suppliers due to volume purchasing discounts, should significantly improve our profit margins in 2013. From a strategic perspective, we believe U-Swirl will be in an excellent position to grow its franchise base both organically and through opportunistic acquisitions in coming years."
-U-Swirl acquires Aspen Leaf Yogurt and Yogurtini - a total of 46 stores.
-Transaction expected to transform U-Swirl into profitable company well-positioned to pursue organic growth and acquisitions.
U-Swirl, headquartered in Henderson, Nevada, currently operates and/or franchises 30 self-serve frozen yogurt stores under the name U-Swirl Frozen Yogurt. The stores are located in Nevada (10 units), Idaho (3), Arizona (4), California (1), Florida (1), Utah (3), Texas (2), Montana (2), New Mexico (3), and Pennsylvania (1). The Company's common stock trades on the OTCQB under the symbol "SWRL".
Privately-owned Yogurtini (YHI Inc,), headquartered in Tempe, Arizona, currently franchises 30 self-serve frozen yogurt stores under the name Yogurtini Self-Serve. The stores are located in Arizona (7), Missouri (8), Kansas (2), Colorado (4), Florida (3), South Carolina (1), Nebraska (1), Georgia (1), New York (1), and Virginia (2).
Aspen Leaf Yogurt LLC, a subsidiary of Rocky Mountain Chocolate Factory Inc., currently franchises and/or operates 16 self-serve frozen yogurt stores under the name Aspen Leaf Yogurt. The stores are located in Colorado (6), Idaho (2), Arizona (1), New Mexico (1), Iowa (2), Texas (1), Illinois (1), Missouri (1), and Tennessee (1).
Under the terms of the agreements, Rocky Mountain Chocolate Factory Inc. contributed to U-Swirl: substantially all contractual and intellectual property of Aspen Leaf Yogurt and Yogurtini; property, plant and equipment relating to six company-owned Aspen Leaf Yogurt stores; and $78,000 in cash. In exchange, Rocky Mountain Chocolate Factory Inc. received from U-Swirl: 60 percent of U-Swirl's outstanding common stock, $500,000 in recourse notes, $400,000 in non-recourse notes, and a stock purchase warrant that allows Rocky Mountain Chocolate Factory Inc. to maintain its pro rata ownership in U-Swirl if existing options and/or warrants are exercised.
"We believe the combination of three self-serve frozen yogurt chains under the U-Swirl umbrella will result in a profitable company that is well-positioned to achieve significant growth through a disciplined organic expansion and acquisition strategy," states Franklin Crail, founder and chief executive officer of Rocky Mountain Chocolate Factory Inc. "By partnering with publicly-traded U-Swirl, our shareholders still have the opportunity to realize the potential for value appreciation in the self-serve frozen yogurt industry. Meanwhile, Rocky Mountain Chocolate Factory's management team will be able to focus all of its attention on the Company's highly profitable chocolate manufacturing operations and retail store franchising business."
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