An Open Letter to the Board of Directors of Caribou Coffee

An Open Letter to the Board of Directors of Caribou Coffee Company 
Accretive Capital Partners' Founder & Managing Partner, Richard
Fearon, Calls for Open Auction Sale Process 
NEW HAVEN, CT -- (Marketwire) -- 12/20/12 --  The following is a
statement from Accretive Capital Partners' Founder & Managing
Partner, Richard Fearon. 
December 20, 2012 
Board of Directors
 Caribou Coffee Company, Inc.
 Attn: Mr. Gary
Graves, Chairman
 3900 Lakebreeze Avenue North
 Minneapolis, MN 55429 
Dear Ladies and Gentleman of the Caribou Board: 
As significant and supportive shareholders of Caribou Coffee Company
for over five years, we at Accretive Capital Partners find ourselves
utterly dismayed by the price you have accepted from Joh. A.
Benckiser to sell our company. 
Accretive Capital Partners, LLC and its affiliates are beneficial
owners of more than 850,000 shares of Caribou Coffee stock and have
stood by the company for more than five years while waiting patiently
for a turn-around to materialize and for strategies for improving
average unit volume and accelerating unit growth to evolve. And now,
here we are with newly installed TurboChef ovens, a strategy to
introduce new and exciting beverages and hot food products, and a
plan to grow the store count by 10-12% annually, only to have the
company handed to a new owner at a fraction of its intrinsic value. 
At $16 per share, the price you have accepted from Benckiser on our
behalf is only 0.9 times annual sales and less than 11 times trailing
earnings before interest, taxes, depreciation and amortization
(EBITDA). Compare these metrics to the price just paid by Benckiser
for Peet's Coffee less than two months ago: Peet's shareholders
received 2.4 times sales and 21 times EBITDA. Moreover, Starbucks'
shareholders receive 3 times sales and 16 times EBITDA for their
shares in a highly efficient public market. As measured by these
real-time metrics, Caribou Coffee is worth $30-$35 per share,
especially considering the control premium a strategic buyer must pay
to enjoy operational synergies. 
Combine these facts with the growth potential at Caribou Coffee:
Average unit volume (AUV) runs around $600,000 per store and
new-store openings were an anemic eight stores last year. The
company's goal is to increase AUV to
 $1 million, an amount achieved
by Starbucks and others, and to accelerate unit growth to 20 stores
this year and by 10-12% thereafter. The substantial benefits of these
two significant financial drivers of growth are imminent, and yet the
board has elected to sell the business off at a multiple of
historical sales less than half of what Benckiser just paid for
Peet's Coffee. 
We are baffled by the board's and management's decision to sell the
company now and to do so without the benefit of engaging a qualified
investment banker, who would market the company and manage an
efficient auction process. Surely it would be in shareholders' best
interests to determine if other major strategic buyers -- such as
Starbucks, Green Mountain, Dunkin' Brands, Krispy Kreme -- had any
interest in acquiring Caribou Coffee. One can only guess what kind of
incentives Benckiser offered to our management team to consummate
this deal. 
We believe we are not alone among other significant shareholders in
deeming our company, Caribou Coffee, to be worth substantially more
than the price you have accepted on our behalf. We encourage you to
pursue available alternatives to consummating this transaction with
Benckiser and remind you of your fiduciary duties to shareholders: As
custodians of our investment, you are charged with a duty to place
shareholder interests above personal gain or other motives. And, with
our proposal for a fair and open auction process, we demand only that
you do the right and honorable thing on behalf of all Caribou Coffee
Company shareholders. 
Richard E. Fearon, Jr.
 Managing Partner 
Accretive Capital Partners
16 Wall Street, 2nd Floor
Madison, Connecticut 06443
tel 203.482.5805
fax 203.318.8302 
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