Dippin’ Dots, Inc., the original “beaded ice cream,” is a manufacturer and distributor of unique, specialty ice cream and related frozen dessert products (e.g., coffees, yogurts and cakes) that are sold worldwide through a network of national and local accounts, franchisees and master license agreements. The Company’s array of innovative and family-oriented products invoke an environment of fun and enjoyment, and the Company continues to fortify the “Dippin’ Dots” brand as a staple at amusement and theme parks, water parks, zoos, sports arenas, festivals, shopping malls, theatres and similar venues and attractions while at the same time establishing new distribution and retail opportunities.
Harpeth Capital began its relationship with the founder of Dippin’ Dots in 2007 and shortly thereafter advised the Company on a debt refinancing in 2008 (during the height of the debt crisis) and a potential equity investment in 2010, with both processes resulting in the receipt of multiple term sheets from interested parties. However, in both instances the founder ultimately chose to turn down new capital and attempted to guide the Company through the economic downturn. Unfortunately, declining financial performance, operational and financial challenges, and an inability to negotiate new terms with its existing lender forced the Company to file Chapter 11 in November 2011.
Given our knowledge of the situation, Harpeth Capital was approved by the bankruptcy court to serve as exclusive financial advisor to Dippin’ Dots as the Company attempted to identify either new sources of capital or a potential acquiror in a Section 363 sale. Given the need to consummate a transaction in a short period of time, we identified approximately 50 parties and quickly generated interest from over a dozen potential financial and strategic acquirors. Ultimately, an agreement was reached to sell the Company to an Oklahoma-based investor group. On May 2, 2012, a motion on the proposed acquisition was approved by the U.S. Bankruptcy Court. The transaction closed on May 18, 2012.