Versacold & Van Houtte’s Bite The Dust…

August 29th, 2007

I just got a letter confirming that both Versacold Income Fund and Van Houtte’s have been bought out. This is a bitter sweet moment for me. During the last several years I’ve had the privilege of investing a low six figure sum for a retired relative. At the time I bought an assortment of growing income trusts that were averaging around 9% to 14% annual dividend yields, divided into monthly payments. This allowed my retired relative to have a stable monthly income to live off of. They were up over 30% (not including the huge 10%+ dividend yield) until the government decided to get rid of Income Trusts. Even though there has been some bad news, I think my relative has done alright. The bitter part of this news is that I actually really liked Versacold’s long term outlooks and think it was stolen… I voted against the deal, but I guess everyone else just seen a quick buck and went for it, not taking into consideration the long term outlook…

I purchased 180 share of Van Houtte’s on August 2, 2006 for $19.29 per share. Just over year later the company was bought out for $25.00 a share for a 29.60% gain! I originally bought this company because I know the Office Coffee Service Industry and this is one of the dominant players, though they don’t always have the best reputation. I didn’t always agree with this company and the way it was run, but you can check out more about my thoughts on it here.

Versacold is a company I don’t think should have been bought for such a cheap price… ridiculous. Nonetheless, I’ve done well with this investment too. I bought 560 shares of Versacold for $8.83 a share on October 21, 2004. They were just bought out for $12.25 a share. That’s a 38.73% gain BUT… During the period the shares were owned, it paid a monthly distribution that gave it a dividend yield over 10%. So I guess it would actually be closer to 60% off this investment. Regardless, this shouldn’t have been sold for so cheap. I wrote about it before here. What a piss off. I would have rather continued to have my relative get the monthly dividend (which was around 11% if I remember correctly) for a year, and that would have been more than the gain from this sale… that is how cheap it was stolen for… Heck, Versacold could have held out for more money and easily got it. That just irks me.

Bye Bye Versacold & Van Houtte’s… Bye Bye.

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