New territory for Gladstone: Investment firm picks up Head Country barbecue sauce company

By: Kirby Lee Davis//The Journal Record//February 20, 2014//

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Jars of Head Country Bar-B-Q Sauce are displayed on a shelf at a Reasor’s store in Jenks. Business developer Gladstone Investment Corp. has acquired Ponca City-based Head Country Inc. (Photo by Rip Stell)

PONCA CITY – Business developer Gladstone Investment Corp. has acquired Ponca City-based barbecue sauce manufacturer Head Country Inc.

Financial details were not disclosed Thursday. McLean, Va.-based Gladstone said it helped reconstitute the operation, providing capital in the form of preferred and common equity, senior debt and a revolving credit facility.

The Ponca City News added detail Tuesday, reporting that Gladstone partnered with Rocky and Kim Flick of Miami, Okla., in its purchase of Head Country Food Products Division.

That left Rocky Flick as president and chief executive of the new Head Country Inc., according to the newspaper. Paul Schatte was named vice president.

Company officials could not be reached for comment.

Head Country expects to use the new capital to expand beyond its five-state grocery distribution area. The company currently produces about 6,000 gallons, or 24,000 quarts, of barbecue sauce daily at its Ponca City plant, according to a report earlier this month by KFOR Channel 4.

Manta.com estimates that Head Country’s former food division employed a staff of 10 to 19 people, with annual revenues of $2.5 million to $5 million.

Officials could not be reached for comment on what effect this sale could have on an Osage County lawsuit by family members of Head Country founders Bud and Freda Head. The couple sold the founding recipe in 1977 to nephew Danny Head for $5,000 plus 1 cent per every quart of sauce sold. KFOR reported that the plaintiffs seek to collect unpaid royalties.

Ponca City’s Head Country Bar-B-Q Restaurant was not involved in the transaction.

This transaction marks the first food manufacturer in Gladstone’s portfolio, according to U.S. Securities and Exchange Commission records. As of Dec. 31, the Nasdaq-traded business development firm held controlling investments in such companies as manifold and pipe manufacturer Acme Cryogenics, golf cart distributor Country Club Enterprises, agricultural machinery manufacturer Jackrabbit Inc., and knives manufacturer SOG Specialty K&T LLC.

Heading Gladstone’s Head Country effort was Managing Director Kyle Largent, the son of former University of Tulsa and Seattle Seahawks receiver Steve Largent.

For the third fiscal quarter ended Dec. 31, Gladstone reported that its net investment income fell 29.3 percent to $4.4 million, or 17 cents per share, from $6.2 million, or 24 cents, for the same period the prior year.