Papa Romano acquires Stucchi's.

Michigan-based Stucchi's Ice Cream, a manufacturer and wholesaler of superpremium ice cream and frozen yogurt, is being acquired by Papa Romano's Enterprises, an emerging Midwestern foodservice holding company. Since its founding in 1986, Stucchi's has developed an especially strong following in the Ann Arbor area among University of Michigan students and faculty.

Stucchi's has 15 stores in Michigan, along with a branded presence in several restaurants in Texas. The stores are operated by independent owners under licensing agreements with Stucchi's. The company also has outlets in development in Michigan, New York City, and Chicago. Its packaged pint containers are sold in about 150 grocery, convenience stores, and restaurants in Michigan, including HEB, Kroger's, and Spec's Market. Stucchi's manufacturing facility with a reported annual production of 60,000 gallons.

The deal is expected to close in April. The purchase price has not been disclosed. This is the second recent acquisition by Papa Romano's, which acquired an equity stake in the Mr. Pita chain in October 2007. Casey Askar, chairman and CEO of Papa Romano's, has frequently expressed his intention to create a national holding company that owns multiple diversified foodservice chains in the manner of Yum! Brands. Askar has indicated that he hopes to follow the Stucchi's acquisition with a chicken restaurant chain.

Askar has already stated he plans to grow the number of Stucchi's units and also to offer existing Mr. Pita and Papa Romano's franchisees the opportunity to add Stucchi's to their restaurants. There is also the suggestion that Stucchi's may expand its menu with one or both of the offerings from its new sister companies. Plans call for Stucchi's current owners to continue as partners in the enterprise and also retain their current management positions.

Askar became majority owner and chairman of Papa Romano's in January 2007, after having served as its CEO the previous year. The chain has 48 Michigan locations. The Papa Romano's menu is focused on Pizza, but stores also offer subs, salads, and a limited dinner menu. Mr. Pita, founded in 1993, has 36 stores in Michigan and Florida. Mr. Pita's menu focuses on wraps made with pita bread, with quesadillas and pizzas also available. For 2007, the Papa Romano/Mr. Pita combination generated revenue of about $34 million. Prior to the Stucchi's acquisition, Papa Romano reported signing area development agreements in Colorado, Texas and North Carolina that could eventually produce a total of 250 new restaurants.