NEW YORK The franchisor of Maggie Moo’s and Pretzel Time has added a cookie brand to its lineup of treat concepts with the $93.7 million purchase of Great American Cookie Co., licensor of more than 300 stores in shopping malls in the Southeast and Southwest.
The purchase by NexCen Brands Inc. is the franchising specialist’s second acquisition in five months from Salt Lake City-based Mrs. Fields Famous Brands. NexCen, which also franchises the Marble Slab Creamery chain, had bought Mrs. Fields’ Pretzel Time and Pretzelmaker concepts in August.
The company, which also owns and franchises such retail concepts as the Athlete’s Foot, is shopping for coffee, doughnut, sandwich and chicken concepts, said Robert D’Loren, president and chief executive of NexCen.
“This brings us one step closer to execute on that plan,” D’Loren said Wednesday.
The deal will allow NexCen to add Great American Cookies to the menu of its ice cream brands and introduce ice cream in the Great American Cookies locations. The pairings will help franchisees offset the seasonality and daypart sales fluctuations of their core products, D’Loren said.
The sale also will enable Mrs. Fields to focus on its core brands, Mrs. Fields Cookies and TCBY yogurt shops, said Stephen Russo, president and chief executive of Mrs. Fields.
NexCen put up $89 million cash and $4.7 million in NexCen common stock to buy the cookie company. The company raised some of the cash by accessing its debt facility from BTMU Capital Corp., raising the tally to $181 million from $150 million.
“Despite today’s credit market, we were able to finance under favorable terms,” D’Loren said. “We see no problem accessing capital for future acquisitions.”
The cookie store chain brings NexCen’s total unit count to 1,900 stores worldwide.
For fiscal 2007, Great American Cookie posted $26 million in unaudited revenues and $13 million in operating income. NexCen said it expects the concept to reach revenues of $27 million and operating income of $14 million in fiscal 2008.
