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Reddy Ice Ip Inc, et al. – ‘424B1’ on 12/4/03

On:  Thursday, 12/4/03, at 6:12pm ET   ·   As of:  12/5/03   ·   Accession #:  1047469-3-39506   ·   File #s:  333-110442, -01, -02, -03, -04, -05

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/05/03  Reddy Ice Ip Inc                  424B1      12/04/03    1:1.9M                                   Merrill Corp/New/FA
          Reddy Ice Holdings Inc
          Cassco Ice & Cold Storage Inc
          Reddy Ice Group Inc
          Reddy Ice Corp
          Southern Bottled Water Co Inc

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Prospectus                                          HTML   1.83M 

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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Filed pursuant to 424(b)(1)
Registration No. 333-110442

PROSPECTUS

$152,000,000
Reddy Ice Group, Inc.

Offer to exchange registered 8⁷/8% Senior Subordinated Notes due 2011 ("New Notes")
for any and all outstanding 8⁷/8% Senior Subordinated Notes due 2011 which have not been registered under the Securities Act of 1933 ("Old Notes")

        This prospectus and accompanying letter of transmittal relate to our proposed exchange offer. We are offering to exchange up to $152,000,000 aggregate principal amount of new registered 8⁷/8% senior subordinated notes due 2011, which we call the New Notes, for any and all outstanding unregistered 8⁷/8% senior subordinated notes due 2011, which we call the Old Notes, issued in a private offering on July 31, 2003, and which have certain transfer restrictions.

        In this prospectus we sometimes refer to the Old Notes and the New Notes collectively as the Notes.

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The terms of the New Notes are substantially identical to the terms of the Old Notes, except that we have registered the New Notes with the Securities and Exchange Commission, which we will refer to as the SEC. Because we have registered the New Notes, they will not be subject to certain transfer restrictions and will not be entitled to registration rights.



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All Old Notes that are validly tendered and not validly withdrawn will be exchanged.



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Tenders of Old Notes may be withdrawn at any time prior to expiration of the exchange offer.



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We will not receive any proceeds from the exchange offer.



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The exchange of Old Notes for New Notes will not be a taxable event for United States federal income tax purposes.



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Holders of Old Notes do not have any appraisal or dissenters' rights in connection with the exchange offer.



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Old Notes not exchanged in the exchange offer will remain outstanding and be entitled to the benefits of the Indenture, but, except under certain circumstances, will have no further exchange or registration rights under the registration rights agreement discussed in this prospectus.



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The Notes will not be listed on a national securities exchange or the Nasdaq Stock Market, Inc. However, we expect that the Notes will be eligible for trading in The Portal^SM Market ("PORTAL"), a subsidiary of The Nasdaq Stock Market, Inc.

        PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 20 FOR A DISCUSSION OF FACTORS YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER.

        NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is December 4, 2003.

TABLE OF CONTENTS

You may not transfer or resell the New Notes except as permitted under the Securities Act and applicable state securities laws.

You should rely only on the information contained in this document or any supplement. We have not authorized anyone to provide you with any information that is different. If you receive any unauthorized information, you must not rely on it. You should disregard anything we said in an earlier document that is inconsistent with what is in our prospectus.

You should not assume that the information in this prospectus or any supplement or any of the information incorporated by reference in this prospectus or any supplement is current as of any date other than the date on the front page of this prospectus.

This document is not an offer to sell nor is it seeking an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that we will make this prospectus available for no less than 180 days after consummation of the exchange offer to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

        "Reddy Ice" and the logo set forth on the cover of this prospectus are our registered trademarks in the United States.

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ADDITIONAL INFORMATION

        For more information on Reddy Ice Group, Inc. (formerly known as Packaged Ice, Inc.) and the availability of other documents concerning Reddy Ice Group, Inc. that have been filed with the SEC, see "Where You Can Find More Information" starting on page 153.

FORWARD LOOKING STATEMENTS

        This prospectus contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operation; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect" or "anticipate" and other similar words.

        Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this prospectus. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in forward-looking statements include, among others, the following:

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general economic trends and seasonality;



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weather conditions;



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our substantial leverage and ability to service our debt;



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the restrictive covenants under our new credit facilities;



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the availability of capital sources;



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fluctuations in our operating costs;



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competitive practices in the industry in which we compete;



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changes in labor conditions;



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our capital expenditure requirements;



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the risks associated with acquisitions and the failure to integrate acquired businesses;



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technological changes and innovations;



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legislative or regulatory requirements; and



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all the other factors described herein under "Risk Factors."

        Additional factors that could cause actual results to differ materially from the forward-looking statements are set forth in this prospectus, including under the headings, "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Selected Historical Consolidated Financial Data" and the related notes. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in

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their entirety by the cautionary statements. We do not intend, and undertake no obligation, to update any forward-looking statement.

INDUSTRY AND MARKET DATA

        Industry and market data used throughout this prospectus were obtained through company research, surveys and studies conducted by third parties and industry and general publications. Industry surveys, studies and publications generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. While we believe that each of these surveys, studies and publications is reliable, neither we nor the initial purchasers have independently verified such data, and we have not made any representations as to the accuracy of such information. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources.

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PROSPECTUS SUMMARY

        In this prospectus, unless otherwise noted, the words "Company," "we," "our," "ours" and "us" refer to Reddy Ice Group, Inc., formerly known as Packaged Ice, Inc. ("Reddy Group") and its subsidiaries for periods through August 14, 2003 and to Reddy Ice Holdings, Inc. ("Reddy Holdings" or "Parent") and its subsidiaries for periods subsequent to August 14, 2003.

        This summary may not contain all the information that may be important to you. In addition to reading this summary, you should carefully review the entire prospectus, especially the information under "Risk Factors" and the more detailed information in the financial statements appearing elsewhere in this prospectus.

The Exchange Offer

        In contemplation of the merger described below under "Prospectus Summary—Recent Developments," on July 31, 2003, Cube Acquisition Corp. ("Cube Acquisition") completed a private offering of $152,000,000 of the Old Notes. In connection with that offering, Cube Acquisition entered into a registration rights agreement with the initial purchasers of the Old Notes in which it agreed, among other things, to deliver this prospectus and to use its best efforts to effect registration of the New Notes within 180 days of the effective date of the merger. The obligations of Cube Acquisition under the Old Notes and the registration rights agreement were assumed by Reddy Group upon the consummation of the merger. You are entitled to exchange in this exchange offer Old Notes that you hold for New Notes with substantially identical terms. You should read the discussion under the headings "Prospectus Summary—Summary of the Terms of the New Notes" beginning on page 14 and "Description of the Notes" beginning on page 97 for further information regarding the New Notes.

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Subject to customary conditions, which we may waive, the exchange offer is not conditioned upon a minimum aggregate principal amount of Old Notes being tendered.



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Our offer to exchange Old Notes for New Notes will be open until 5:00 p.m., New York City time, on January 8, 2004, unless we extend the expiration date.



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You should also carefully review the procedures for tendering the Old Notes beginning on page 90 of this prospectus.



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You may withdraw your tenders of Old Notes at any time prior to the expiration of the exchange offer.



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If you fail to tender your Old Notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected.



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The exchange of Old Notes for New Notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.

        We believe that the New Notes that will be issued in this exchange offer may be resold by you without compliance with the registration and prospectus delivery provisions of the Securities Act, if you can make the representations in the fifth paragraph under "The Exchange Offer—Exchange Terms" on page 87 below. We cannot guarantee that the SEC would make a similar decision about this exchange offer. If our belief is wrong, or if you cannot truthfully make the representations mentioned above, and you transfer any New Note issued to you in the exchange offer without meeting the registration and prospectus delivery requirements of the Securities Act, or without an exemption from such requirements, you could incur liability under the Securities Act. We are not indemnifying you for any such liability. You should read the discussion under the headings "Prospectus Summary—Summary of the Terms of the Exchange Offer" beginning on page 11 and "The Exchange Offer" beginning on page 87 for further information regarding this exchange offer and resale of the New Notes.

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Recent Developments

        The Merger.    Reddy Holdings, formerly known as CAC Holdings Corp., and its direct wholly owned subsidiary, Cube Acquisition were formed on behalf of Trimaran Fund Management L.L.C. ("Trimaran") and Bear Stearns Merchant Banking ("BSMB," together with Trimaran, the "sponsors") for the purpose of acquiring us. On August 15, 2003, in accordance with the terms of a merger agreement entered into on May 12, 2003, Cube Acquisition was merged with and into us. Pursuant to the merger agreement, each of our former public stockholders received approximately $3.64 in cash for each share of common stock owned by such stockholder. As a result of the merger, our common stock was delisted from the American Stock Exchange and we are now a wholly owned subsidiary of Reddy Holdings, which is owned by the equity sponsors and their affiliated funds, along with certain members of our senior management. See "The Merger and Related Transactions" beginning on page 28.

        In connection with the merger, we consummated certain related financing transactions, including the issuance by Cube Acquisition on July 31, 2003 of $152.0 million of the Old Notes and the entering into by Reddy Group on August 15, 2003 of senior credit facilities in the amount of $170.0 million. See "Description of New Credit Facilities" beginning on page 96.

        The Triangle Ice Co., Inc. Acquisition.    We entered into a Stock Purchase Agreement dated November 5, 2003 among Reddy Ice Corporation, Triangle Ice Co., Inc. ("Triangle") and the shareholders of Triangle, whereby on November 6, 2003 our wholly-owned subsidiary, Reddy Ice Corporation, purchased all of the outstanding shares of capital stock of Triangle for an aggregate purchase price of approximately $64.3 million (subject to customary post-closing adjustments). In connection with the acquisition, Triangle became a wholly-owned subsidiary of Reddy Ice Corporation, and was subsequently merged into Reddy Ice Corporation. Triangle is headquartered in Lumberton, North Carolina and operates primarily in North and South Carolina. With annual revenues of approximately $30 million, Triangle owns or operates eight ice manufacturing facilities and one distribution center.

        Other Acquisition.    We entered into an Asset Purchase Agreement with L.D. Plante, Inc. and affiliates as of October 1, 2003, whereby Reddy Ice Corporation acquired the "Service Ice" division of L.D. Plante, Inc. for total consideration of $3.1 million (subject to customary post-closing adjustments) which was paid from our available working capital.

General

        Unless otherwise indicated, the remaining information contained in this prospectus summary does not include data specific to the acquisition of Triangle or the impact that such acquisition may have on our operations. For specific information relating to the operations of Triangle, see "Business—Triangle Business Description" beginning on page 69 and "Unaudited Pro Forma Condensed Combined Financial Information" beginning on page 32.

Our Company

        We are the largest manufacturer and distributor of packaged ice in the United States, serving approximately 73,000 customer locations in 31 states and the District of Columbia under the Reddy Ice™ brand name. Our sales are more than four times that of any other packaged ice supplier. We have the leading market position in the majority of the local and regional ice markets in which we operate, and we estimate that over 80% of our ice sales are in markets where we are the market leader. Our principal product is ice packaged in seven to fifty pound bags, which we sell to a highly diversified customer base, including supermarkets, mass merchants and convenience stores. In 2002, we sold the equivalent of over four hundred twenty million seven pound bags of ice. Our products are primarily sold throughout the southern United States (the "Sun Belt"), one of the most attractive regions in the country for packaged ice sales due to warm weather, extended peak selling seasons and favorable

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population growth patterns. We believe population growth is one of the primary drivers for growth in demand for packaged ice, and we operate in 12 of the 15 fastest growing metropolitan areas in the United States. In addition, our broad geographic reach helps insulate us from the impact of cool or rainy weather in any particular region. No other manufacturer and distributor of packaged ice in the United States has the geographic presence, infrastructure or capacity necessary to meet the multi state demands of customers in our markets. Our business is characterized by consistent annual customer demand, attractive margins and modest annual capital requirements. We believe that retail consumer demand for packaged ice is relatively unaffected by adverse economic conditions due to its low cost and the lack of readily available substitutes.

        We operate in two business segments: ice products and non-ice products and operations. Ice products have historically accounted for approximately 92% of our total revenues. This segment consists of the traditional manufacture and delivery of ice from a central point of production to the point of sale as well as sales from The Ice Factory® machines, our proprietary equipment located in our customers' high volume locations that produce, package and store ice through an automated, self-contained process. Historically, traditional ice manufacturing and Ice Factory sales accounted for approximately 90% and 10% of ice product revenues, respectively. Our other business segment, non-ice products and operations, consists of refrigerated warehousing for third parties and the manufacture and sale of bottled water. Non-ice products and operations have historically accounted for approximately 8% of our total revenues.

        We produce ice in cube, half-moon, cylindrical, crushed and block forms and provide our customers with a variety of delivery options to meet their specific needs. In addition to the manufacture and distribution of packaged ice in small bags (typically seven pounds), we sell medium bags (16 to 20 pounds) and ten-pound block bags to our retail customer base, which primarily consists of supermarkets, mass merchants and convenience stores. We also sell ice in assorted bag sizes ranging from 16 to 50 pounds to restaurants, bars, stadiums, vendors and caterers and block ice in 10, 25 and 300 pound sizes to our commercial, agricultural and industrial customers. A portion of our products is sold through distributors who deliver ice to our customers on our behalf and who resell ice to their own customers.

        Since the organization of Reddy Ice Group, Inc. in 1990, we have built a strong and loyal customer base by providing a high level of service and quality at competitive prices utilizing our extensive network of ice manufacturing plants and distribution centers. We have a diverse customer base, with our largest customer accounting for less than 8% of our revenues for the year ended December 31, 2002. We have long-standing relationships with our customers across all major retail channels, evidenced by our high retention rates with prominent supermarkets, mass merchants and convenience stores, such as Albertson's, Circle-K, ExxonMobil, Kroger, 7-Eleven and Wal-Mart. Most of our major retail ice customers, including eighteen of our top twenty customers, have purchased ice from us and our predecessor companies for over a decade. Within our markets we are the sole supplier of packaged ice to almost all of our top twenty customers. The percentage of our volume sold to national and regional convenience and grocery store chains has grown over the last several years as each of these retail channels has consolidated. We have benefited from supplying these national and regional retailers as many of these customers have grown at rates in excess of industry averages.

        At November 1, 2003, we owned or operated 48 ice manufacturing facilities, 50 distribution centers, approximately 70,000 merchandisers (cold storage units installed at customer locations), approximately 3,000 Ice Factories, six refrigerated warehouses and one bottled water plant. We had an aggregate daily ice manufacturing capacity of approximately 14,500 tons, the equivalent of four million seven pound bags of ice.

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Industry Overview

        Our management estimates that the annual wholesale market for packaged ice is approximately $1.8 billion, which includes manufacturers such as ourselves and in-house production, primarily by small retail operations and, to a lesser extent, by large retailers. The packaged ice industry is highly fragmented and is led by us and several regional, multi facility operators. The industry includes numerous local and regional companies of varying size and resources, with most ice manufacturers having annual revenues of less than $1.0 million.

        Traditional ice manufacturers produce and distribute packaged ice from a centrally located facility and, as a result of high transportation costs, are typically limited to servicing customers within approximately 100 miles from the point of production. Packaged ice suppliers compete based primarily on service, quality and price, with success dependent upon prompt and reliable delivery during peak seasonal months, an efficient manufacturing and distribution system, high-density customer distribution routes within a region and high customer concentration in a market area. Each customer location typically carries one brand of ice provided by a single supplier.

        The packaged ice industry is highly seasonal, characterized by peak demand during the warmer months of May through September, with an extended peak selling season in the southern United States. We believe volume growth in the packaged ice industry generally tracks population growth, thus favoring geographic markets with faster population growth. Demand within specific geographic markets can also be affected by weather conditions, with cool or rainy weather negatively impacting ice purchases.

Competitive Strengths

        We believe our competitive strengths include:

        Unique Multi State Presence and Infrastructure.    We are the largest company in the packaged ice industry, serving customers in 31 states and the District of Columbia. Our large geographic footprint gives us the necessary manufacturing capacity and distribution scale to service large retailers across multiple states and regions. Smaller local suppliers do not have the multi state or multi region service capabilities increasingly required by such customers. As a result of our unique multi state presence and infrastructure, we believe we are well positioned to benefit from continued consolidation within our customer base and from increased reliance by national and regional customers on suppliers that serve multiple markets. In addition to providing us with competitive advantages with our customers, our broad geographic reach also helps insulate us from the variability of weather patterns in any individual region.

        Leading Market Position in Attractive Ice Markets.    We are the largest manufacturer and distributor of packaged ice in the United States, with over 80% of our ice revenues generated in markets where we have the leading market share. We are the market leader in the Sun Belt, one of the most attractive regions in the United States for packaged ice in terms of weather and population growth patterns. The markets we serve include 12 of the 15 fastest growing metropolitan areas in the United States. We believe our strong market position in these desirable markets will contribute to future growth in revenue and profitability.

        Long Standing Relationships with High Quality Customers.    We have been providing ice products and delivery services to many of our customers for more than a decade. These customers include prominent retailers across a variety of channels. Many of these customers require significant volumes of ice products on a multi state basis and would require numerous suppliers to replace the extent of the services we currently provide. In addition, our customers depend on our consistent ability to ensure prompt and reliable delivery, particularly during peak seasonal months. The strength of our customer relationships is further reinforced by the fact that almost all of our customers rely on a single supplier

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of packaged ice at each point of sale. We believe that the strength of our customer relationships provides us with a significant competitive advantage over other suppliers in our markets.

        Multiple Distribution Service Offerings.    We attract and retain customers by offering a variety of service alternatives to meet our customers' specific supply chain needs. These alternatives include traditional distribution methods, such as delivery to our merchandisers, delivery of bulk quantities to retail locations and warehouse shipments from a centralized point of production. In addition, our proprietary Ice Factory units provide certain high volume customers with self-contained on-site ice production, packaging and storage. These delivery alternatives enable us to offer our customers the flexibility to meet their specific supply requirements in a reliable and cost-efficient manner.

        Strong, Incentivized Management Team with Proven Execution Capabilities.    Led by our Chairman and Chief Executive Officer, William P. Brick, and our President and Chief Operating Officer, Jimmy C. Weaver, our management team has extensive industry experience, averaging 14 years with us and our predecessors. Our management team has been responsible for successfully executing our strategy of increasing our profitability through operational improvements, including cost rationalization, facility consolidation and working capital management, while strengthening customer relationships. In connection with the merger and the acquisition of Triangle, certain members of our senior management team have a combined equity investment of $3.686 million in Parent and have the opportunity to earn an additional 10% of Parent's fully diluted common equity through incentive options.

Business Strategy

        Our business strategy is to strengthen our competitive position, increase revenues and drive profitability by:

        Enhancing Revenue Growth.    We believe there are several opportunities to maintain and grow our revenues through:

        Growth from Our Existing Customers.    We intend to capitalize on our long-standing customer relationships to grow with our large national and regional customers as they seek to increase their market penetration and consolidate the retail segments in which they operate. As the sole supplier in our regions to the majority of these customers, we are well positioned to share in our customers' growth. In addition, for certain customers for whom we are not the sole supplier, we believe there is an opportunity to capture incremental volume as these customers continue to reduce their supplier base in order to achieve efficiencies across the supply chain.

        Growth from Outsourcing Trends of Large Retailers.    Several large retailers continue to produce packaged ice in-house. Consistent with general outsourcing trends among retailers, we have assumed certain ice supply requirements for a number of large retail chains that previously operated captive ice manufacturing facilities, including Albertson's, HEB and Safeway. We believe we will be able to capture additional volume from new and existing customers as retailers increasingly choose to outsource and focus on their core competencies.

        New Product Introductions.    We continue to broaden our product offerings through the introduction of new sizes of bagged ice. We believe that introducing new bag sizes at various price points offers an opportunity to enhance our product mix and increase our sales and operating margins.

        Continuing Efficiency Improvements.    In the last four years, we have consolidated our ice manufacturing and distribution facilities, reducing the original total number of facilities from 116 to 98. At the same time, we have increased our volumes and maintained our overall capacity by relocating equipment and investing in new equipment. We have identified several opportunities for continued facility consolidations that we expect can be implemented without a significant increase in capital

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expenditures. In addition, we believe there are opportunities for continued efficiency improvements through distribution route optimization.

        Selectively Pursuing Acquisitions.    The packaged ice industry continues to be highly fragmented. In addition to the Triangle and Service Ice acquisitions, we will continue to consider strategic acquisitions in existing or adjacent geographic markets that enhance the density of our distribution routes, provide capacity rationalization opportunities, increase our market penetration in existing markets or expand our presence in contiguous markets.

The Merger and Related Transactions

        The Merger.    On August 15, 2003, the merger and related financing transactions were consummated (including the release from escrow of the net proceeds from the July 31, 2003 sale of the Old Notes). Since the consummation of the acquisition and related financing transactions, the equity sponsors and selected members of Reddy Group's senior management have owned all of the equity of Reddy Holdings. As a result of the acquisition and related financing transactions, Reddy Holdings directly owns 100% of the outstanding common stock of Reddy Ice Group, Inc.

        The aggregate acquisition consideration was $460.7 million. Upon consummation of the merger, each of our public stockholders received approximately $3.64 in cash for each share of common stock owned and the holder of each outstanding option to purchase our common stock received an amount in cash equal to the excess of approximately $3.64 over the exercise price of such option. The merger consideration paid to the common stockholders and option and warrant holders was approximately $76.8 million.

        In connection with the merger, we and our affiliates consummated certain related financing transactions, including the issuance by Cube Acquisition on July 31, 2003 of $152.0 million of the Old Notes (issued at 99.297% of par) due August 1, 2011 (which Notes were assumed by Reddy Group upon the consummation of the merger). The net proceeds from the sale of the Old Notes were placed in escrow pending consummation of the merger. On August 15, 2003, the escrowed net proceeds were released to fund a portion of the acquisition. In addition, on August 15, 2003, we entered into a credit agreement with various lenders, including Canadian Imperial Bank of Commerce, Bear Stearns Corporate Lending Inc., and Credit Suisse First Boston, as administrative agent, which provided for a term loan in the amount of $135.0 million and a five-year revolving credit facility in the amount of $35.0 million. On November 6, 2003, in connection with our acquisition of Triangle, we entered into an amendment to our senior credit facilities pursuant to which the lenders made a supplemental term loan, increasing the term loan by $45.0 million to $180.0 million. The Old Notes and the senior credit facilities are guaranteed by the following entities which we will describe in this prospectus as "guarantors," which term will also include any future guarantors as described in this prospectus:

        The obligations under the senior credit facilities are collateralized by (i) first priority pledges of all of the stock of the guarantors and (ii) security interests in and liens on all accounts receivable, inventory and other property and assets of Reddy Holdings and the guarantors.

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Sources and Uses of Funds in Connection with the Merger

        The merger was financed through:

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gross proceeds of $150.9 million from the sale of the Series A Notes (face value of $152.0 million);



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borrowings of $135.0 million under our new $135.0 million term loan credit facility; and



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contribution by the equity sponsors and selected members of Reddy Group's senior management of $188.1 million from the sale of common and preferred shares by Reddy Holdings.

        The following table summarizes the sources and uses of funds for the merger and related transactions:

(1)

Represents $152.0 million aggregate principal amount of senior subordinated notes issued at a discount of $1.1 million or 0.703%.

(2)

$184.6 million of the equity contribution was contributed by investment affiliates of the equity sponsors and $3.5 million was contributed by our existing management.

(3)

Includes $0.2 million of accrued interest and $0.9 million of prepayment premiums under our existing credit facilities. We had $61.7 million outstanding under our prior credit facilities as of the merger date.

(4)

Includes $6.5 million of tender offer premiums.

(5)

Upon consummation of the merger, we purchased 725 Ice Factory machines and 257 merchandisers (storage units installed at customer locations) that we had previously leased.

(6)

Represents debt issuance costs of $12.7 million, direct merger and other associated costs of $14.5 million, including transaction fees and expenses and a $7.6 million transaction fee paid to the sponsors and certain members of management. This amount also includes $1.75 million paid to members of management under change of control bonus agreements and $0.5 million in restricted stock of Reddy Holdings issued to members of our management.

Our Sponsors

        Trimaran Fund Management, L.L.C. is a private asset management firm, headquartered in New York. Trimaran Fund Management, L.L.C. is the investment manager to Trimaran Fund II, a $1.0 billion private equity fund dedicated to leveraged buyouts, recapitalizations and growth capital investments in middle market companies throughout the United States and Western Europe. Trimaran manages in excess of $1.5 billion of equity capital and since 1995 has invested in more than 60 portfolio companies.

        Bear Stearns Merchant Banking, the private equity affiliate of Bear, Stearns & Co. Inc., currently manages Bear Stearns Merchant Banking Partners II, a $1.5 billion private equity fund. Bear Stearns

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Merchant Banking invests private equity capital in leveraged buyouts, recapitalizations and growth capital opportunities alongside experienced management teams. Bear Stearns Merchant Banking currently manages a $1.7 billion equity capital pool and, since its inception in 1997, has been an investor in more than 30 portfolio companies.

Corporate Information

        Reddy Ice Group, Inc. (formerly known as Packaged Ice, Inc.) was incorporated on August 14, 1990. Reddy Ice Holdings, Inc. was incorporated on May 8, 2003. Reddy Group's and Reddy Holdings' principal executive offices are located at 3535 Travis Street, Suite 170, Dallas, Texas 75204 and its telephone number is (214) 526-6740.

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Summary of the Terms of the Exchange Offer

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Summary of the Terms of the New Notes

        The form and terms of the New Notes are substantially the same as the form and terms of the Old Notes, except that the New Notes are registered under the Securities Act. As a result, the New Notes will not bear legends restricting their transfer and will not contain the registration rights contained in the Old Notes. See "Description of the Notes" beginning on page 97 for more information.

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Summary Historical and Pro Forma Consolidated Financial Data

        The following table sets forth, for the periods and dates indicated, our summary historical and pro forma combined financial data. Reddy Holdings and its wholly owned subsidiary Cube were formed on May 8, 2003 for the purpose of acquiring Packaged Ice and effecting certain capital transactions in connection with such acquisition. On August 15, 2003 Cube merged with and into Packaged Ice, Inc., with Packaged Ice, Inc. being the surviving corporation. In connection with the merger Packaged Ice, Inc. was renamed Reddy Ice Group, Inc. Reddy Holdings and Cube conducted no operations during the period from May 8, 2003 through August 14, 2003. In this summary, "Successor" refers to Reddy Holdings and its subsidiaries while "Predecessor" refers to pre-merger Reddy Group and its subsidiaries, which was then known as "Packaged Ice, Inc."

        Our summary historical financial data as of December 31, 2001 and 2002 and for the years ended December 31, 2000, 2001 and 2002 have been derived from the audited financial statements of the Predecessor included elsewhere in this prospectus. The summary historical financial data as of December 31, 1998, 1999 and 2000 and for the years ended December 31, 1998 and 1999 have been derived from the audited financial statements of the Predecessor for such years, which are not included in this prospectus. We have derived the summary historical financial data of the Successor as of September 30, 2003 and for the period from May 8, 2003 through September 30, 2003, and the summary historical financial data of the Predecessor for the period from January 1, 2003 through August 14, 2003 and the nine month period ended September 30, 2002 from our unaudited financial statements included elsewhere in this prospectus.

        The table also contains summary unaudited pro forma condensed financial information derived from the financial information set forth under "Unaudited Pro Forma Condensed Consolidated Financial Information" included elsewhere in this prospectus. The table also includes pro forma adjustments related to the merger and related transactions and the acquisition of Triangle. The summary pro forma data do not purport to represent what our results of operations or financial position actually would have been if the merger and the related transactions or the Triangle acquisition had occurred at any date, nor do such data purport to project the results of operations for any future period. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable.

        The summary unaudited pro forma and historical financial data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with our audited consolidated financial statements, the selected consolidated historical financial data and the unaudited pro forma condensed consolidated financial statements and, in each case, the related notes included elsewhere in this prospectus, the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the historical consolidated financial statements and accompanying notes included elsewhere in this prospectus.

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17

(1)

Includes non-cash amortization of debt issue costs of $2.3 million and $1.7 million in the pro forma combined twelve months ended December 31, 2002 and the pro forma combined nine months ended September 30, 2003, respectively.

(2)

Excludes expenditures in connection with acquisitions. Capital expenditures for the period from May 8, 2003 (Date of Inception) to September 30, 2003 and for the pro forma combined nine months ended September 30, 2003 include $9.5 million related to the purchase of leased equipment in connection with the merger and related transactions.

(3)

EBITDA represents net income (loss) before the cumulative effect of change in accounting principle and preferred dividends and before depreciation and amortization, gain or loss on disposition of assets, impairment of assets, gain or loss on extinguishment of debt, interest expense and income taxes. EBITDA is presented herein because we believe it is a useful supplement to operating income and cash flow from operations in understanding cash flows generated from operations that are available for taxes, debt service and capital expenditures. Management also uses this measurement as part of its evaluation of core operating results and underlying trends. However, EBITDA, which does not represent operating income or net cash provided by operating activities as those items are defined by GAAP, should not be considered by prospective purchasers of the notes to be an alternative to operating income or cash flow from operations or indicative of whether cash flows will be sufficient to fund our future cash requirements. In addition, the EBITDA measure presented herein may differ from and may not be comparable to similarly titled measures used by other companies.

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(4)

Working capital is defined as current assets less current liabilities.

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RISK FACTORS

        You should carefully consider the risks described below before deciding to surrender your Old Notes in exchange for New Notes pursuant to this exchange offer. These risks apply to both the Old Notes and the New Notes. If any of the following risks and uncertainties actually occur, our business, financial condition and results of operations could be materially adversely affected. In such case, we may not be able to make principal and interest payments on the notes, and you may lose some or all of your investment.

Risks Relating to the Notes

The indenture governing the notes offered hereby and the credit agreement governing our new credit facilities impose significant operating and financial restrictions on us and, in the event of a default, all of these borrowings become immediately due and payable.

        The indenture governing the Notes offered hereby imposes operating and other restrictions on us and many of our subsidiaries. These restrictions affect, and in many respects, limit or prohibit our and our restricted subsidiaries' ability to:

•

incur or guarantee additional indebtedness or issue certain preferred stock;



•

pay dividends on our capital stock or redeem, repurchase or retire our capital stock or subordinated indebtedness;



•

make certain investments;



•

enter into arrangements that restrict dividends from our subsidiaries;



•

engage in transactions with affiliates;



•

sell assets, including capital stock of our subsidiaries; and



•

merge or consolidate with other companies or transfer all or substantially all of our assets.

        In addition, the credit agreement governing our new credit facilities includes other and more restrictive covenants and prohibit us from prepaying most of our other debt while loans under the new credit agreement are outstanding. The new credit agreement also requires us to achieve and maintain compliance with specified financial ratios, which ratios will become more restrictive over time. Our ability to comply with these ratios will be affected by events beyond our control.

        The restrictions contained in the indenture and the new credit agreement could:

•

limit our ability to plan for or react to market conditions or meet capital needs or otherwise restrict our activities or business plans; and



•

adversely affect our ability to finance our operations, to enter into strategic acquisitions, investments or other capital needs or to engage in other business activities that would be in our interest.

        A breach of any of the restrictive covenants in the new credit agreement or our inability to comply with the required financial ratios could result in a default under the new credit agreement. If any such default occurs, the lenders under our new credit facilities may elect to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable, enforce their security interest, require us to apply all of our available cash to repay these borrowings (even if the lenders have not declared a default) or prevent us from making debt service payments on the notes, any of which would result in an event of default under the notes. The lenders will also have the right in these circumstances to terminate any commitments they have to provide further borrowings. If we are unable to repay outstanding borrowings when due, the lenders under the new credit agreement will have the right to proceed against the collateral granted to them to secure the debt owed to them.

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If the debt under the new credit agreement were to be accelerated, we cannot assure you that our assets would be sufficient to repay such debt in full or to repay the notes and our other debt.

The Notes are contractually junior in right of payment to our senior debt, and the guarantees are contractually junior to all senior indebtedness of the guarantors.

        The Notes are contractually junior in right of payment to all of our senior indebtedness, and the guarantees are contractually junior in right of payment to all senior indebtedness of the guarantors. As of September 30, 2003, on a pro forma basis to include the acquisition of Triangle, we, excluding our subsidiaries, had approximately $180.0 million of senior indebtedness, all of which would have been indebtedness under our new credit facilities. In addition, Parent, excluding its subsidiaries, had approximately $180.0 of senior indebtedness, consisting of its guarantee of our new credit facilities; and the subsidiary guarantors had approximately $180.4 million of senior indebtedness, consisting of their guarantees of our new credit facilities and $0.4 million of other senior indebtedness.

        We may not pay principal, premium, if any, interest or other amounts on the Notes in the event of a payment default in respect of certain senior indebtedness, including debt under our new credit facilities, unless that indebtedness has been paid in full or the default has been cured or waived. In addition, if certain other defaults regarding certain senior indebtedness occur, we may be prohibited from paying any amount on the notes and the guarantors may be prohibited from paying any amount on the guarantees for a designated period of time. If we are, or any of the guarantors is, declared bankrupt or insolvent, or if there is a payment default under, or an acceleration of, any senior indebtedness, we are required to pay the lenders under our new credit facilities and any other creditors who are holders of senior indebtedness in full before we apply any of our assets to pay amounts owing with respect to the notes. Accordingly, we may not have enough assets remaining after payments to holders of our senior indebtedness to make any payments on the notes.

We may not have the ability to raise the funds necessary to finance a change of control offer.

        Upon the occurrence of certain specified change of control events, we will be required to offer to purchase the notes plus accrued and unpaid interest, if any, to the date of purchase. If a change of control were to occur, we cannot assure you that we would have sufficient funds to pay the purchase price of the outstanding notes, and we expect that we would require third party financing to do so. We cannot assure you that we would be able to obtain this financing on favorable terms, if at all. In the event of a change of control, due to certain restrictions in our new credit facilities, we will have to offer to repay all borrowings under our new credit facilities or obtain the consent of our lenders under our new credit facilities to purchase the notes. If we do not obtain such consent or repay such borrowings, we would be prohibited from purchasing any Notes. In such case, our failure to purchase tendered Notes would constitute a default under the indenture governing the Notes, which, in turn, would constitute a default under our new credit facilities. See "Description of the Notes—Change of Control" on page 106.

A subsidiary guarantee could be voided if it constitutes a fraudulent transfer under U.S. bankruptcy or similar state law, which would prevent the holders of the notes from relying on that subsidiary to satisfy claims.

        The Notes are guaranteed by all of our subsidiaries. Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a subsidiary guarantee can be voided, or claims under the subsidiary guarantee may be subordinated to all other debts of that subsidiary guarantor if, among other things, the subsidiary guarantor, at the time it incurred the indebtedness evidenced by its subsidiary guarantee or, in some states, when payments become due under the subsidiary guarantee,

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received less than reasonably equivalent value or fair consideration for the incurrence of the subsidiary guarantee and:

•

was insolvent or rendered insolvent by reason of such incurrence;



•

was engaged in a business or transaction for which the subsidiary guarantor's remaining assets constituted unreasonably small capital; or



•

intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.

        A subsidiary guarantee may also be voided, without regard to the above factors, if a court found that the subsidiary guarantor entered into the subsidiary guarantee with the actual intent to hinder, delay or defraud its creditors.

        A court would likely find that a subsidiary guarantor did not receive reasonably equivalent value or fair consideration for its subsidiary guarantee if the subsidiary guarantor did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void a subsidiary guarantee, holders of the notes would no longer have a claim against the subsidiary guarantor and would effectively be subordinated to all other indebtedness and other liabilities of that guarantor. Sufficient funds to repay the notes may not be available from other sources, including the remaining guarantors, if any. In addition, the court might direct holders of the notes to repay any amounts that they already received from the subsidiary guarantor.

        The measures of insolvency for purposes of fraudulent transfer laws vary depending upon the governing law. Generally, a subsidiary guarantor would be considered insolvent if:

•

the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets;



•

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they became absolute and mature; or



•

it could not pay its debts as they became due.

        Each subsidiary guarantee contains a provision intended to limit the subsidiary guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its subsidiary guarantee to be a fraudulent transfer. We cannot assure you that this limitation will protect the guarantees from fraudulent conveyance attack or, if it does, that the guarantees will be in amounts sufficient, if necessary, to repay the notes when due.

There may be no active trading market for the Notes.

        The Notes constitute an issue of securities for which there is no established trading market. We do not intend to list the Notes on any national securities exchange or to seek the admission of the Notes for quotation through the National Association of Securities Dealers Automated Quotation System. In addition, market making activity is subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934, as amended, and may be limited during the exchange offer. Although the Notes will be eligible for trading in PORTAL, there can be no assurance as to the development or liquidity of any market for the Notes, the ability of the holders of the Notes to sell their Notes or the price at which the holders would be able to sell their Notes.

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The market value of the New Notes could be materially adversely affected if only a limited number of New Notes are available for trading.

        To the extent that a large amount of the Old Notes are not tendered or are tendered and not accepted in the exchange offer, the trading market for the New Notes could be materially adversely affected. Generally, a limited amount, or "float," of a security could result in less demand to purchase such security and, as a result, could result in lower prices for such security. We cannot assure you that a sufficient number of Old Notes will be exchanged for New Notes so that this does not occur.

If you do not properly tender your Old Notes, you will continue to hold unregistered Old Notes and your ability to transfer Old Notes will be adversely affected.

        We will only issue New Notes in exchange for Old Notes that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal, or are surrendered pursuant to the guaranteed delivery procedures set forth below. Therefore, you should allow sufficient time to ensure timely delivery of the Old Notes and you should carefully follow the instructions on how to tender your Old Notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the Old Notes. If you do not tender your Old Notes or if we do not accept your Old Notes because you did not tender your Old Notes properly, then, after we consummate the exchange offer, you may continue to hold Old Notes that are subject to the existing transfer restrictions. After the exchange offer is consummated, if you continue to hold any Old Notes, you may have difficulty selling them because there will be fewer Old Notes outstanding.

Risks Relating to Our Indebtedness

Our substantial leverage and debt service obligations could harm our ability to operate our business and make payments on the notes.

        We are highly leveraged and have significant debt service obligations. As of September 30, 2003, on a pro forma basis for the Triangle acquisition, we have total debt of approximately $331.4 million and total stockholders' equity of $195.6 million. On a pro forma basis, our interest expense was $27.2 million and $20.4 million for the twelve months ended December 31, 2002 and nine months ended September 30, 2003, respectively. Such pro forma interest expense includes non-cash amortization of debt issue costs of $2.3 million and $1.7 million for the twelve months ended December 31, 2002 and nine months ended September 30, 2003. Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay when due the principal of, interest on or other amounts due in respect of our indebtedness.

        Our substantial debt could have other important consequences to you, including the following:

•

we will be required to use a substantial portion, if not all, of our free cash flow from operations to pay principal and interest on our debt, and our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, strategic acquisitions, investments, joint ventures and other general corporate requirements;



•

our interest expense could increase if interest rates in general increase, because a substantial portion of our debt will bear interest at floating rates and we cannot assure you that we will be able to effectively hedge against fluctuations in interest rates or that such hedging activities will not result in payments by us;



•

our substantial leverage will increase our vulnerability to general economic downturns and adverse competitive and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;

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•

our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business; and



•

our failure to comply with the financial and other restrictive covenants in the indenture governing these notes and the credit agreement governing our new credit facilities, which require us to maintain specified financial ratios and limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could harm our business or prospects and could result in our bankruptcy.

We could incur more indebtedness, which may increase the risks associated with our substantial leverage, including our ability to service our indebtedness.

        The indenture relating to the Notes and the credit agreement governing our new credit facilities permit us, under certain circumstances, to incur a significant amount of additional indebtedness. In addition, we may incur additional indebtedness through our revolving credit facility. If we incur additional debt, the risks associated with our substantial leverage, including our ability to service our debt, would increase.

Servicing our indebtedness requires a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

        We cannot be certain that our earnings will be sufficient to allow us to pay principal and interest on our debt, including the Notes, and meet our other obligations. Our ability to generate cash from our operations is subject to weather, general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. As a result, we cannot assure you that our business will generate sufficient cash flow from operations in amounts sufficient to enable us to service our debt and to fund our other liquidity needs. If we cannot service our debt, we will have to take actions such as reducing or delaying strategic acquisitions, investments and joint ventures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We cannot assure you that any of these remedies could, if necessary, be effected on commercially reasonable terms, or at all. In addition, the terms of existing or future debt instruments, including the credit agreement governing our new credit facilities and the indenture for the notes offered hereby, may restrict us from adopting some of these alternatives. Therefore, because of these and other factors beyond our control, we may be unable to pay the principal, premium, if any, interest or other amounts on the Notes.

If we fail to meet our payment or other obligations under our new credit facilities, the lenders under our new credit facilities could foreclose on, and acquire control of, substantially all of our assets.

        The lenders under our new credit facilities received a pledge of all of the equity interests of our current subsidiaries. Additionally, these lenders have a lien on substantially all of our assets. As a result of these pledges and liens, if we fail to meet our payment or other obligations under our new credit facilities, those lenders are entitled to foreclose on substantially all of our assets and liquidate those assets. Under those circumstances, we may not have sufficient funds to pay principal, premium, if any, and interest on the notes. As a result, the holders of the Notes may lose a portion of or the entire value of their investment.

Risks Relating to Our Business

Our failure to successfully compete could adversely affect our prospects and financial results.

        Our businesses are highly competitive. We have many competitors in each of our geographic markets offering similar products and services. Competition in our businesses is based primarily on service, quality and price. If we fail to successfully compete against our competitors in any of these areas, our business will be adversely affected. There are low barriers to entry in the ice industry and we

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could be adversely affected by any expansion of capacity by our existing competitors or by new entrants in our markets. Retaining existing customers and obtaining new customers is important to our future performance. If we fail to adequately serve our existing base of customers, our financial performance will be negatively impacted. We could also be adversely affected if our larger grocery or convenience store customers decide to manufacture their own ice rather than purchase our products.

The seasonal nature of the ice business results in losses and lower profit margins in the first and fourth quarters of the year.

        We experience significant seasonal fluctuations in our net sales and profitability. We make a disproportionate amount of our sales in the second and third calendar quarters when the weather is generally warmer, which results in an increased demand for ice. We also earn our net income during these same periods. As a result of seasonal revenue declines and the lack of a corresponding decrease in expenses, we experience net losses and materially lower profit margins during the first and fourth calendar quarters. Variations in demand could have a material adverse effect on the timing of our cash flows and therefore our ability to service our obligations with respect to our indebtedness, including the notes. In addition, because our operating results depend significantly on sales during the second and third calendar quarters, our results of operations may fluctuate significantly if the weather during these periods is cool or rainy.

The results of our operations may be adversely affected by weather.

        Cool or rainy weather can decrease sales, while extremely hot weather may increase our expenses, each resulting in a negative impact on our operating results and cash flow. Ice consumers demand ice for a variety of reasons, but many of them buy ice in connection with outdoor related activities, both commercial and recreational. As a result, demand for ice increases during periods of warm, sunny weather, and conversely, demand decreases during periods of cool, rainy weather. During extended periods of cool or rainy weather on a national basis, our revenues and resulting net income may substantially decline. Hot weather does not necessarily result in greater net income. During extended periods of hot weather, our profits and cash flow may decline because of an increase in expenses in response to excess demand. We may have to transport ice from one plant to another and, in some cases, purchase ice from third party sources and transport it to a specific market to meet this excess demand, resulting in higher expenses and inconsistent service and product quality.

Increases in the prices of electricity, certain raw materials, insurance and other required expenses could have an adverse effect on our results of operations.

        We use substantial amounts of electricity in connection with our manufacturing process. Increases in market rates for electricity could have an adverse impact on our operations.

        Our business is also sensitive to increases in the cost of fuel required to operate the refrigerated trucks we use to deliver ice and to increases in the cost of polyethylene, which is the primary raw material used to manufacture the bags we use to package our ice. Our business is sensitive to increases in insurance costs, including in the areas of general liability, workers compensation, health and vehicle insurance. We have already experienced increases in fuel costs, bag costs and insurance costs and may experience further increases in the future. If the prices for these items or other expenses should increase significantly, we will incur additional costs that we may not be able to pass along to our customers. There can be no assurance that significant changes in the prices of electricity, polyethylene, fuel, insurance or other commodities would not have a material adverse effect on our business, results of operations and cash flows.

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We could incur substantial costs as a result of violations of or liabilities under environmental laws.

        Our ice manufacturing and cold storage operations are subject to a wide range of environmental laws and regulations governing, among other things, air emissions, wastewater discharges, the use, management and disposal of hazardous and non-hazardous materials and wastes and the cleanup of contamination. Non compliance with such laws and regulations or incidents resulting in environmental releases could cause us to incur substantial costs, including cleanup costs, fines and penalties, third party claims for personal injury, investments to retrofit or upgrade our facilities and programs or curtailment of our operations. For example, our ice manufacturing and cold storage operations use refrigerants such as ammonia and freon. Several of our ammonia facilities have not yet implemented risk and safety management programs as required under applicable laws. Other facilities may not be in compliance in all material respects with certain freon refrigerant requirements, such as leak detection and repair, recordkeeping or reporting. In addition, the market price of freon is rising as a result of phase outs under federal laws, which could significantly increase our operating costs in the future if we are not able to obtain approved substitutes. From time to time, our use of ammonia has resulted in releases that have temporarily disrupted our manufacturing operations and resulted in lawsuits or administrative penalties. We are currently involved in litigation resulting from an ammonia release in June 2001 at our Baton Rouge, Louisiana facility. See "Business—Legal Proceedings" beginning on page 69.

        We cannot assure you that we will not incur material environmental costs or liabilities in the future or that such costs or liabilities will not have a material adverse effect on our business, financial condition or results of operations.

Government laws and regulations could have an adverse effect on our results of operations.

        Like any food company, we are subject to various federal, state and local laws relating to many aspects of our business, including labeling, sanitation, health and safety and manufacturing processes. We cannot predict the types of government regulations that may be enacted in the future by the various levels of government or how existing or future laws or regulations will be interpreted or enforced. The enactment of more stringent laws or regulations or a stricter interpretation of existing laws and regulations may require additional expenditures by us, some of which could be material.

If we are unable to retain senior executives and attract and retain other qualified employees, our business might be adversely affected.

        Our success depends in part on our ability to attract, hire, train and retain qualified managerial, sales and marketing personnel. Competition for these types of personnel is high. We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially and adversely affected. Our success also depends to a significant extent on the continued service and performance of our senior management team and in particular on the continued service of William P. Brick, our Chairman and Chief Executive Officer, and Jimmy C. Weaver, our President and Chief Operating Officer. The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition.

Our acquisitions may not be successfully integrated and could cause unexpected financial difficulties.

        We anticipate that we may, from time to time, selectively acquire additional businesses, assets or securities of companies that we believe would provide a strategic fit with our business. Acquired businesses will need to be integrated with our existing operations. There can be no assurance that we will effectively assimilate these companies into our business.

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        Any acquisitions will also be accompanied by risks, such as potential exposure to unknown liabilities of acquired companies and the possible loss of key employees and customers of the acquired business. Acquisitions are also subject to risks associated with the difficulty and expense of integrating the operations and personnel of the acquired companies, the potential disruption to our business and the diversion of management time and attention. In addition, as a result of future acquisitions, we may increase our debt level.

        Our failure to adequately manage the risks associated with any acquisitions could have a material adverse effect on our financial condition or results of operations.

        We recently acquired Triangle and Service Ice, both of which will need to be integrated with our existing operations. There can be no assurance that we will effectively assimilate either of their operations into our business. In addition, these acquisitions may result in potential disruption to our business and the diversion of management's time and attention. Our failure to assimilate these operations or material disruptions or diversions due to these acquisitions, particularly in the case of Triangle, could have a material adverse effect on our business.

Accidents involving our products and equipment could expose us to product liability claims.

        We are subject to a risk of product liability claims and adverse publicity if a consumer is or claims to be harmed while using our products or equipment. Any such claim may result in negative publicity, loss of revenues or higher costs associated with litigation.

        We currently carry product liability insurance that we believe is adequate to cover our losses in these situations. However, this insurance may be insufficient to pay for all or a large part of these losses. If our insurance does not adequately cover these losses, our results of operations and cash flow would decrease and such a decrease could be material.

We may lose customers' business to competitors as a result of our limited intellectual property protection, including on The Ice Factory®.

        As the sole major company using an on-site ice production and delivery system within our market area, we have enjoyed a distinct competitive advantage because the Ice Factory is preferred to traditional ice delivery by certain of our high volume customers and because the Ice Factory portion of our business gives us more flexibility during peak seasons than our competitors. In 2001, a competitor began testing machines similar to the Ice Factory in certain of its markets. If our competitor or any new competitors are successful with the rollout of a competing system, we could lose business to these companies, which would result in decreased cash flows and results of operations.

        It is also our practice to protect certain of our proprietary materials and processes by relying on trade secrets laws and non-disclosure and confidentiality agreements. There can be no assurance that confidentiality or trade secrets will be maintained or that others will not independently develop or obtain access to such materials or processes.

We are party to two lawsuits related to the merger, which if determined adversely to us, could result in the imposition of damages against us and could harm our business and financial condition.

        We have been served with two complaints asserting putative class action lawsuits in Texas in connection with the merger. In addition, we may be subject to other lawsuits in connection with the merger that have not yet been filed. In the event that the current lawsuits with respect to the merger are not dismissed or decided in our favor or we become subject to additional suits, these lawsuits could result in the imposition of damages against us or even the rescission of the merger and related transactions. In the event that damages are awarded, our business and financial condition could be harmed. See "Business—Legal Proceedings" beginning on page 69.

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We are controlled by our sponsors and their affiliates, whose interests in our business may be different from yours.

        By reason of our sponsors' and their affiliates' ownership of us and their collective ability, pursuant to a stockholders agreement among stockholders of Parent, to designate a majority of the members of the board of directors of Parent, our sponsors will control actions to be taken by Parent and our board of directors, including amendments to our certificate of incorporation and by-laws and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. The interests of our sponsors and their affiliates will likely differ from yours in material respects.

THE MERGER AND RELATED TRANSACTIONS

The Merger

        Reddy Holdings, formerly known as CAC Holdings Corp., and its wholly owned subsidiary, Cube Acquisition were formed on behalf of our sponsors, Trimaran and BSMB. On August 15, 2003, in accordance with the terms of the merger agreement dated May 12, 2003 Cube Aquisition was merged with and into us. Pursuant to the merger agreement, each stockholder of Reddy Group (formerly known as Packaged Ice, Inc.) received approximately $3.64 in cash for each share of common stock owned by such stockholder. As a result of the merger, our common stock was delisted from the American Stock Exchange and we are now a wholly owned subsidiary of Reddy Holdings, which is owned by the equity sponsors and their affiliated funds, along with certain members of our senior management.

Related Transactions

        The aggregate acquisition consideration was $460.7 million (inclusive of change in control payments). Upon consummation of the merger, each public stockholder of Reddy Group received approximately $3.64 in cash for each share of common stock owned. The holder of each outstanding option to purchase Reddy Group common stock received an amount in cash equal to the excess of approximately $3.64 over the exercise price of such option. The merger consideration paid to the common stockholders and option and warrant holders of Reddy Group was approximately $76.8 million.

        In connection with the merger, we and our affiliates consummated certain related financing transactions, including the issuance by Cube Acquisition on July 31, 2003 of $152.0 million of the Old Notes (issued at 99.297% of par) due August 1, 2011 (which Notes were assumed by Reddy Group upon the consummation of the merger). The net proceeds from the sale of the Old Notes were placed in escrow pending consummation of the merger. On August 15, 2003, the escrowed net proceeds were released to fund a portion of the acquisition. In addition, on August 15, 2003, we entered into a credit agreement with various lenders, including Canadian Imperial Bank of Commerce, Bear Stearns Corporate Lending Inc, CIBC World Markets Corp., Bear Stearns and Company Inc. and Credit Suisse First Boston, as administrative agent, which provides for a term loan in the amount of $135.0 million and a revolving credit facility in the amount of $35.0 million. The Old Notes and the senior credit

28

facilities are guaranteed by the following entities which we will describe in this prospectus as "guarantors," which term will also include any future guarantors as described in this prospectus:

        The obligations under the senior credit facilities are collaterized by (i) first priority pledges of all of the stock of the guarantors and (ii) security interests in and liens on all accounts receivable, inventory and other property and assets of Reddy Holdings and the guarantors.

Sources and Uses of Funds in Connection with the Merger

        The merger was financed through:

•

gross proceeds of $150.9 million from the sale of the Series A Notes (face value of $152.0 million);



•

borrowings of $135.0 million under our new $135.0 million term loan facility; and



•

contribution by the equity sponsors and selected members of Reddy Group's senior management of $188.1 million from the sale of common and preferred shares by Reddy Holdings.

        The following table summarizes the sources and uses of funds for the merger and related transactions:

(1)

Represents $152.0 million aggregate principal amount of senior subordinated notes issued at a discount of $1.1 million or 0.703%.

(2)

$184.6 million of the equity contribution was contributed by investment affiliates of the equity sponsors and $3.5 million was contributed by our existing management.

(3)

Includes $0.2 million of accrued interest and $0.9 million of prepayment premiums under our existing credit facilities. We had $61.7 million outstanding under our prior credit facilities as of the merger date.

(4)

Includes $6.5 million of tender offer premiums.

(5)

Upon consummation of the merger, we purchased 725 Ice Factory machines and 257 merchandisers (storage units installed at customer locations) that we had previously leased.

(6)

Represents debt issue costs of $12.7 million, direct merger and other associated costs of $14.5 million, including transaction fees and expenses and a $7.6 million transaction fee paid to the

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sponsors and certain members of management. Also, this amount includes $1.75 million paid to members of management under change of control bonus agreements and $0.5 million in restricted stock of Reddy Holdings issued to members of our management.

ACQUISITIONS

Triangle Acquisition

        We entered into a Stock Purchase Agreement dated November 5, 2003 among Reddy Ice Corporation, Triangle and the shareholders of Triangle, whereby on November 6, 2003, our wholly-owned subsidiary, Reddy Ice Corporation, purchased all of the outstanding shares of capital stock of Triangle for an aggregate purchase price of approximately $64.3 million (subject to customary post-closing adjustments). In connection with the acquisition, Triangle became a wholly-owned subsidiary of Reddy Ice Corporation, and was subsequently merged into Reddy Ice Corporation. Triangle is headquartered in Lumberton, North Carolina and operates primarily in North and South Carolina. With annual revenues of approximately $30 million, Triangle owns or operates eight ice manufacturing facilities and one distribution center.

        The acquisition of Triangle was financed by:

•

a cash equity contribution to Reddy Ice Holdings, Inc. of $10.0 million, which shall be purchased on a pro-rata basis according to shareholders ownership percentages, including an aggregate amount of approximately $186,000 from certain of the senior management team, including the Named Executive Officers. See "Certain Relationships and Related Transactions" beginning on page 82.



•

an additional term loan in the amount of $45.0 million, pursuant to an amendment to Reddy Group's senior secured credit facility (the "Credit Facility"). See "Description of New Credit Facilities" beginning on page 96; and



•

Reddy Group available working capital.

Other Acquisition

        We entered into an Asset Purchase Agreement as of October 1, 2003, with L.D. Plante, Inc. and its affiliates whereby Reddy Ice Corporation acquired the "Service Ice" division of L.D. Plante for total consideration of $3.1 million (subject to customary post-closing adjustments), which was paid from our available working capital.

USE OF PROCEEDS

        This exchange offer is intended to satisfy certain obligations of Reddy Group under our registration rights agreement. We will not receive any proceeds from the issuance of the New Notes. The proceeds from the offering of the Old Notes, together with funds from the related financing transactions, were used to consummate the acquisition.

        We have agreed to pay for the expenses of the exchange offer. In exchange for issuing the New Notes as contemplated in this prospectus, we will receive Old Notes in the same principal amount. The form and terms of the New Notes are identical in all material respects to the form and terms of the Old Notes, except as described below under the heading "The Exchange Offer—Exchange Terms" beginning on page 87. The Old Notes surrendered in exchange for the New Notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the Old Notes will not result in any increase in our outstanding debt.

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CAPITALIZATION

        The table below sets forth our actual cash and cash equivalents and capitalization as of September 30, 2003, and on a pro forma basis to give effect to the acquisition of Triangle as if it had occurred on that date. See "Use of Proceeds," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Selected Historical Consolidated Financial Data," "The Merger and Related Transactions," "The Acquisitions" and "Description of New Credit Facilities." The table below should be read in conjunction with our consolidated financial statements included elsewhere in this prospectus.

(1)

Includes a new supplemental term loan of $45.0 million issued under the existing credit facility, as amended.

(2)

Represents $152.0 million aggregate principal amount of Old Notes net of unamortized original issue, discount of $1.0 million as of September 30, 2003. The Old Notes were issued at a discount of $1.1 million or 0.703%.

(3)

Includes equity contributions for the acquisition of Triangle of $8.7 million, net of a $1.3 million transaction fee paid to the sponsors and certain members of management who are also shareholders of Reddy Holdings.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        Reddy Holdings and its wholly owned subsidiary Cube were formed on May 8, 2003 for the purpose of acquiring Packaged Ice and effecting certain capital transactions in connection with such acquisition. On August 15, 2003 Cube merged with and into Packaged Ice, with Packaged Ice being the surviving corporation. In connection with the merger Packaged Ice was renamed Reddy Group. Reddy Holdings and Cube conducted no operations during the period from May 8, 2003 through August 14, 2003. In the Unaudited Pro Forma Condensed Combined Financial Information, "Successor" refers to Reddy Holdings and its subsidiaries, while "Predecessor" refers to pre-merger Reddy Group and its subsidiaries, which was then known as "Packaged Ice, Inc."

        The unaudited pro forma condensed combined financial statements have been derived from i) the audited historical financial statements of the Successor for the period from May 8, 2003 (date of inception) through August 14, 2003, the Predecessor as of December 31, 2002 and for the year then ended, and Triangle as of April 30, 2002 and 2003 and for the years then ended, and ii) the unaudited interim financial statements of the Successor as of September 30, 2003 and for the period from August 15, 2003 through September 30, 2003, the Predecessor for the period from January 1, 2003 through August 14, 2003, and Triangle as of September 30, 2003 and for the period from May 1, 2003 through September 30, 2003. Certain reclassifications have been made to Triangle's historical income statements to conform their presentation with that of Reddy Holdings. Triangle has historically reported depreciation and amortization expense within cost of sales and operating expenses, while Reddy Holdings reports such items separately.

        The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2002 and the nine month period ended September 30, 2003 give effect to the following events as if they had occurred on January 1, 2002:

•

The merger



•

The receipt of proceeds from the offering of the Old Notes and borrowings under the new credit facilities



•

The receipt of proceeds from the sponsors and certain members of senior management of Reddy Holdings



•

The acquisition of Triangle

        The unaudited pro forma condensed combined balance sheet as of September 30, 2003 gives effect to the following events as if they occurred on September 30, 2003:

•

The acquisition of Triangle



•

The receipt of proceeds from borrowings under the new credit facilities



•

The receipt of proceeds from the sponsors and certain members of senior management of Reddy Holdings

        The pro forma adjustments which give effect to the various events described above are based upon currently available information and certain assumptions and estimates that management believes are reasonable. The acquisitions were accounted for using the purchase method of accounting and the resulting assets acquired and liabilities assumed have been reflected at their estimated fair market values at the respective dates of acquisition. The unaudited pro forma condensed combined financial statements reflect our assessment of the fair values of Packaged Ice's assets based upon valuations and other studies that have been substantially finalized. Reddy Group has not completed an assessment of the fair values of Triangle's assets for purposes of allocating the purchase price. Accordingly, for purposes of the unaudited pro forma condensed combined financial information, the excess of the purchase price over the net assets acquired has been allocated entirely to goodwill. Reddy Group is

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currently reviewing the purchase price allocation and will determine whether any of the purchase price allocated to goodwill should be allocated to fixed or identifiable intangible assets. The final allocation of the purchase price will differ from the amounts reflected herein.

        The unaudited pro forma condensed consolidated financial information should be read in conjunction with "Selected Historical Pro Forma Consolidated Financial Data," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "The Merger and Related Transactions," "The Acquisitions" and our historical consolidated financial statements included elsewhere in this prospectus.

        The unaudited pro forma condensed consolidated financial information is intended for informational purposes only and does not purport to represent the results of operations that actually would have actually occurred or that may be obtained in the future if the transactions described had occurred as presented in such information. In addition, future results may vary significantly from the results reflected in such statements due to general economic conditions, utility prices, labor costs, competition and other factors, many of which are beyond our control. See "Risk Factors" beginning on page 20.

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UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
As of September 30, 2003
(in thousands)

        See notes to unaudited pro forma condensed combined financial statements.

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NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
(in thousands, except share amounts)

(a)

Reflects the adjustment of Triangle's cash balances which were retained by the seller.

(b)

Proceeds from borrowings under Reddy Group's new credit facilities, the Old Note Offering and cash equity contributions to Reddy Group by Reddy Holdings are calculated using the following assumptions:

---

(1)

Represents a supplemental term loan made under the Company's existing credit facility. The supplemental term loan has the same terms as the pre-existing term loan.



(2)

The Company will issue 5,000 shares of common stock, $0.01 par value, and 5,000 shares of Series A, 12% cumulative redeemable preferred stock, $0.01 par value, to its existing shareholders. The each share of common and preferred stock is valued at $1,000 per share.



(3)

Represents the use of cash on hand in the Company's bank accounts.



(4)

The total purchase price is $64,273 (subject to customary post-closing adjustments), consisting of cash paid to the seller and the repayment of Triangle's bank note payable. At the closing of the Triangle acquisition on November 6, 2003, the balance of the outstanding bank note payable was $16.7 million.



(5)

Represents debt issuance costs of $650, direct acquisition costs of $350, including transaction fees and expenses, and a $1,326 transaction fee to be paid to the shareholders of the Company.