Chipwich: Old News 2007

CoolBrands sells Eskimo Pie, Chipwich brands to Dreyer's

Last Updated: Wednesday, January 24, 2007 | 6:42 PM ET 

 

 CBC News

Struggling CoolBrands International sold off more of its frozen treat empire as Dreyer's bought its popular Eskimo Pie and Chipwich brands, the company said Wednesday.

The Markham, Ont.-based company sold the two brands and its Real Fruit trademark to Dreyer's Grand Ice Cream for $18.9 million US. Dreyer's is a subsidiary of Swiss-based Nestlé.

CoolBrands began as Yogen Fruz in the 1980s.

Its founders — brothers Aaron and Michael Serruya —    built it into the third-largest ice cream maker in  North America.

Some of the proceeds of the sale were used to repay a $5-million US debt to JP Morgan Chase. The rest will be used for "working capital purposes," the company said.

It changed its name in 2000, when it merged with Eskimo Pie Corp.

CoolBrands bought the Chipwich brand in 2002 from a New York company. 

But things started to unravel in 2004, when the company lost the licensing rights for frozen products under the Weight Watchers and Smart Ones brands. The low-carb craze didn't help, either.

Last year, its shares plunged to penny stock territory after it breached a covenant in its credit agreement with JP Morgan.

CoolBrands hasn't filed quarterly financial reports since July, when it reported a nine-month loss of $24.2 million on sales of $258.1 million. 

Three weeks ago, it exited the yogurt business when it sold its dairy subsidiary to a U.S. private equity firm for $50 million US. It said at the time that it was eyeing the possible sale of some of its ice cream assets, its food services division, and its real estate holdings.

(With files from Canadian Press)