EMERYVILLE Calif. CIC Advantage Holdings LLC, an affiliate of private-equity group CIC Partners, has purchased a 5.6-percent stake in Jamba Inc., parent of the struggling Jamba Juice smoothie chain.
Recent regulatory filings show the group purchased nearly 3.1 million shares of Jamba for $2.65 million, or an average of 85 cents per share. Jamba’s share price has fluctuated between 37 cents per share and $3.40 per share during the past 52 weeks and hasn’t closed above $1 since last September.
CIC Partners, based in Dallas, counts numerous foodservice veterans as partners and says it looks for undervalued companies where its operating experience can be leveraged. Partner John Antioco, for example, served in numerous roles at Taco Bell, Circle K and 7-Eleven, as well as former board roles at T.G.I. Friday’s franchisee Main Street Restaurant Group. Other operating partners hold experience at Yum! Brands Inc., Quiznos and Buffet Partners.
The firm has been active of late, buying a controlling stake and investing $12 million in frozen yogurt brand Red Mango last August, and forming a foodservice management venture with the New York Yankees, the Dallas Cowboys and investment bank Goldman Sachs last October. That partnership, which created Legends Hospitality Management LLC, was created to provide on-site management, catering and merchandising to sports and entertainment facilities. Its first contracts were with the Yankees' and Cowboys' new stadiums.
Only a few months after Emeryville, Calif.-based Jamba went public in late 2006, its stock was trading as high as $12.25 per share. For the past few quarters, however, the company has reported negative same-store sales results and growing net losses as consumers closed their wallets amid a domestic recession. The 750-unit Jamba Juice chain also was hit hard in California, which accounts for about 75 percent of its system, by housing sector woes that took a heavy toll on the state’s economy and consumers’ wealth.
For the first 40 weeks of 2008, ended Oct. 7, Jamba posted a net loss of $108 million, which included an $82.6 million trademark impairment charge, compared with a year-earlier profit of $36.7 million. Its revenue rose 9 percent to $286.8 million. Same-store sales fell 7.2 percent.
