Ben & Jerry's Homemade, Inc.
Ben & Jerry's is one of the best known consumer brands in the U.S. However, despite its quirky cache, the company faced significant strategic problems - particularly with respect to ice cream distribution. Further, the consolidation within the food industry made competition increasingly difficult for middle-market companies such as Ben & Jerry's. In 1997, new management was brought in to improve profitability and to refocus the strategy for Ben & Jerry's. At that time, Gordian Group was retained to assist in evaluating the company's strategic and financial options in order to enhance shareholder value.
Over a three-year period, Gordian Group analyzed and pursued a variety of transactions, including sale of the company, investments in the company, distribution joint ventures and additions to the company's product lines. The prism Ben & Jerry's used to evaluate these options was perhaps unique in American corporate governance - involving an eclectic weighing of value, desire for independence and social mission. Without satisfying each of these often conflicting criteria, it was unlikely that any solution would meet the Board's approval. Yet, given the competitive and distribution dynamics the company faced, it needed to find a solution.
The initial indications of interest from would-be acquirors valued Ben & Jerry's shares in the $20's. Moreover, these proposals did not satisfy the independence and social mission goals of the Board. Through a long negotiating process stretching over many months, Gordian Group was eventually able to craft a viable solution that:
resulted in Unilever buying the company at a price that valued the shares at $43.60 per share (almost double the original indications)
kept the existing Board in place to monitor the social mission and product quality
provided significant additional sums to the Ben & Jerry's trust
For Gordian Group's work on this transaction, it was recently honored by Mergers & Acquisitions as the recipients of the award for the Middle-Market Deal of the Year for 2000.
