EXCLUSIVE: Handel’s sees majority investment from California firm
CANFIELD — Handel's Ice Cream now has majority investment from a California firm.
The investment was made in November, the same time the Canfield-based company re-registered itself as an out-of-state LLC formed in Delaware, according to Ohio Secretary of State filings discovered by Mahoning Matters.
Private equity firm ClearLight Partners LLC of Newport Beach, Calif., announced in late November it made a majority investment in the ice cream shop franchisor, meaning it acquired at least half of the company. ClearLight's website indicates in October it recapitalized Handel's "in partnership with management," which allows company owners to liquidate while keeping, at the least, a partial interest in the company.
Terms of the November transaction were not disclosed in the release, but that release does signal the partnership would help the 75-year-old Valley brand continue to spread nationwide.
"It has been a pleasure working with ClearLight given their strong background in helping franchised concepts and other consumer brands to grow," Handel's CEO Leonard Fisher is quoted in the release.
"I knew early on that we had a shared vision for how to support Handel's growth while preserving the brand's core values and continuing to invest in the quality ingredients and process that make Handel's ice cream the best there is," Fisher said in the release. "Together, we are looking to become to many more people what we already are to our customers — America's favorite scoop shop!"
Though the ClearLight deal could suggest the local icon would no longer be locally owned, Fisher affirmed he's not selling the business.
"We've been here 75 years; we're not going anywhere," he told Mahoning Matters.
Fisher, however, declined to discuss anything further about ClearLight's investment or the Handel's business.
In October, Handel's Enterprises Inc. filed a certificate for "converting out of existence" with the Ohio Secretary of State, meaning the business is no longer registered as a domestic business entity in Ohio. Simultaneously, Fisher formed Handel's Incorporated of Youngstown LLC in Delaware, which was registered with the Ohio Secretary of State as a foreign, for-profit LLC in November.
While corporations can be required to file annual reports that can reveal members of its board and key financial data, limited liability corporations aren't required to adhere to such internal controls — but they also aren't offered the same liability protections as corporations, according to the Secretary of State's office. The office has seen a recent shift in businesses converting to LLCs.
More than 1 million domestic and foreign businesses — and more than two-thirds of Fortune 500 companies — have chosen to incorporate in Delaware, which offers a "complete package" of business-friendly statutes and legal services, including the state's Court of Chancery, which solely tries corporate law disputes, and without juries, according to the Delaware Division of Corporations.
Handel's' oldest articles of incorporation available on the Secretary of State's website date back to 1980, when the business was named Handel's Old Fashioned Ice Cream Inc. They were signed by Handel's founder Alice C. Handel.
"On a hot summer day in July, 1945, Alice Handel began serving ice cream out of her husband's gas station in Youngstown," reads the history featured on the Handel's website. "Her first batches were made using old fashioned recipes with fresh fruit she picked from her own backyard."
Handel's has since grown to nearly 50 corporate and franchised locations in Ohio, California, Florida, Indiana, Nevada, Pennsylvania, Arizona and Oregon.
The business is celebrating its 75th anniversary this year. Along with Schwebel's Bakery and Good Humor bars, it is one of the Valley's legacy brands.
A big part of ClearLight's investment interests is in founder- or family-owned businesses, according to its website.
Of about 5.5 million family-owned businesses in the country, more than three-quarters are owned by baby boomers age 55 to 73. Forty-seven percent of family business owners said they intend to retire in the next five years, according to a blog post on ClearLightPartners.com.
"So we are amidst a wave of estate planning-driven business sale activity that is buoying the population of target companies eligible for [private equity] funds," it continues. "Sad but true — only 30 percent of family businesses survive the transition from first- to second-generation ownership. Even worse is that only 12 percent survive the handoff from the second to third.
"Most business owners are all-too-familiar with these statistics and related adages, so they are looking for a safe set of hands to usher their life's work into the future.
ClearLight in 2013 invested in Taymax, one of the leading Planet Fitness franchisees. During ClearLight's ownership, Taymax's 12 Planet Fitness clubs grew to 50. When the firm sold its Taymax holdings to Trilantic North America in 2018, less than five years later, it was a leading franchisee, according to a release from ClearLight.
Later that year, ClearLight sold water cooler-maker Pure Water Technology-PHSI to Quench USA. ClearLight invested in Pure Water in 2009 and oversaw the establishment of several regional branches, according to a release.
Andrew Brennan, ClearLight partner, said the firm "knew Handel's was special from the moment we were introduced to the business."
"The welcoming culture of the company, the incredible focus of the team on simply making great ice cream, the fanaticism of its customer base and the taste and quality of its ice cream itself were all inspiring to us," he's quoted in the November release. "This partnership represents a chance to introduce the fabulous Handel's ice cream experience to more people across the country and to continue to delight children, adults and families with a product that Alice Handel would be proud of."
This story was originally published January 28, 2020 at 3:52 AM with the headline "EXCLUSIVE: Handel’s sees majority investment from California firm."