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Katie LenziniJeremy Epstein
February 27, 2007
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Background Info
• Started in 1978 in Burlington, Vermont
• Founders: Ben Cohen & Jerry Greenfield
• Spent $5 learning how to make ice cream
• Bought an old gas station and opened shop
• Initial Investment: $12,000 ($4,000 borrowed)
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Timeline• 1980 started distributing pints in grocery stores• 1984 Vermont Only stock offering
– $10.50 x 75,000 shares = $787,500– Used to build new factory
• 1985 NASDAQ IPO– $13 x 450,000 shares = $5,850,000 market cap
• 1992 Additional Stock Issued– $30.50 x 1,265,000 shares = $38,582,500
• August, 2000 Acquired by ___________
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A) DREYERSB) UNILEVERC) MEADOWBROOK LANE CAPITALD) CHARTWELL INVESTMENTS
Who acquired Ben & Jerry’s?
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UNILEVER
$43.60
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Mission Statement Analysis
• Product– Did they fulfill their mission statement?
• Economic– Did they increase value for shareholders…
was there anything that prevented this?
• Social– What ways did they help the community?
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How did they help community?
• Ben and Jerry’s Foundation– Donates minimum $1.1 million per year
• Green Team– Focuses on environmental concerns
• CAT (community action teams)– Get employees involved in service projects
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Takeover Target?
• Slowdown in growth• 45% share of market• Already had existing infrastructure• Strong, developed brand name• Very low debt ratios
– Debt-equity ratio: 18.68%– Debt-ratio: 15.7%
• Return on Equity 8.9%– Can get better return in market
• Donated 7.5% to charity…inefficient use of earnings?
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Stakeholders
• Employees (specifically management)
• Suppliers
• Charities
• Shareholders
• Social Mission
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Fair Market Value
05
101520253035404550
Dreyer'sGrand
Eskimo Pie TCBYEnterprises
YocreamInternational
Ben & Jerry's
Average industry P/E ratio: 23.92
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What happened with acquisition
• April 12, 2000 Unilever announced it would acquire Ben & Jerry’s Homemade at $43.60 per share for 8.4 million outstanding shares (that’s over $300 million for ice cream!!)
• Maintained Independent BOD, but replaced Ben & Jerry’s CEO with Unilever employee a few months later
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Social Mission Under Unilever
• Following acquisition, Ben and Jerry ceased involvement because they felt Unilever just used social mission as marketing ploy
• In 2005, new CEO took over Ben & Jerry’s business and made effort to focus on social mission, resulting in Ben and Jerry becoming involved again
• Since then, Ben & Jerry’s continues to support community and donate portion of earnings to charity
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What is your favorite flavor?
A) Cherry Garcia
B) Phish Food
C) Chunky Monkey
D) Chubby Hubby
E) Other
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Questions?
Information came from Ben & Jerry’s website, Unilever’s website, and www.msnbc.com