Jamba Juice is going private. The 800-unit brand known for its smoothies will be acquired by Focus Brands.
Focus Brands will pay $13 per share, a 36 percent premium to the 200-day trading average of $9.50 that adds up to a $200 million sale price. The price shows all the work that Jamba Juice CEO Dave Pace has been doing to reinvigorate the brand over the past two years is paying off.
“Over the last few years, we have worked hard to strengthen our foundation and reposition this iconic brand for the future. Partnering with Focus Brands will allow us to build on this work and further accelerate the company’s growth,” said Pace in a press release.
Pace recently detailed some of those big changes in an interview with Franchise Times. Since moving from California to Texas, the brand has done a lot of work. But amid that move it also had a big stumble, missing an earnings report for NASDAQ. Without audited results, it didn’t have a franchise disclosure document, and without an FDD the company was obviously limited in its sales efforts. But the audit finished, the FDD was filed and the team has been busy in the meantime.
“We’ve been doing a lot, since we made the move. We’ve basically rebuilt the entire organization, we have a new management team a new approach to beverages, introducing a healthier approach to lifestyle products,” said Pace. “We’ve been strengthening the operations of the business so now as we go back and fire up the franchising machine we go out there with a strong operation platform.”
He said that evolution will continue for the brand, including a new look and feel, expansion of convenience and consumer-facing technology and healthier menu innovations. Drive-thrus are getting a special focus.
“Part of the new focus is to go out and identify more and more drive-thrus, the drive-thru locations outperform to our traditional locations but also outperformed our projections,” said Pace.
The biggest change was moving to an asset-light model, which was “substantially complete” in June 2017.
“I think the biggest change was really orienting the team to franchise support, when you have a mix of company and franchised locations, the reality is that franchisees don’t get all the support they could,” said Pace. “We were split 60-40, which makes it difficult to be supportive of both equally.”
Focus Brands also operates Cinnabon, Carvel, McAlister’s Deli, Moe’s Southwest Grill, Schlotzsky’s and Auntie Anne’s. The group has a proclivity for operating brands that have scale and continue to be a “fan favorite” indulgence—even though Jamba Juice has made efforts to be a little healthier.
“Benefiting from an extremely loyal customer base and strong franchise operators, Jamba Juice is one of the category leaders in the fast growing smoothie and juice category,” said Steve DeSutter, CEO of Focus Brands Inc. “We are excited to welcome Jamba Juice with such an iconic heritage into our family of well-known and highly loved ‘fan favorite’ brands.”
The acquisition also puts Jamba Juice under the Roark Capital umbrella, which includes the recently formed Inspire Brands that operates Arby’s, R Taco and Buffalo Wild Wings. Roark also controls Jimmy John’s, Hardee’s, Corner Bakery, Culvers, Naf Naf Grill, Jim ‘n Nick’s BBQ and Il Fornaio.
North Point Advisors LLC is serving as financial advisor and DLA Piper LLP is serving as legal counsel to Jamba. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to FBI. The transaction is expected to be complete in the third quarter of 2018.