Joh. A. Benckiser Group agreed to acquire Caribou Coffee Co. for $340 million, the investment firm’s third purchase of a coffee asset this year.
Closely-held Benckiser, run by former Reckitt Benckiser Group Plc Chief Executive Officer Bart Becht, offered $16-a-share in cash per Caribou share, 30 percent above the last closing share price of $12.32. Caribou will continue to be based in Minneapolis and operate under its own brand and management, the companies said today in a statement.
Benckiser boosted its stake in Dutch coffee maker D.E Master Blenders 1753 to more than 15 percent in October, after spending about $941.2 million to purchase Emeryville, California-based Peet’s Coffee & Tea Inc. Caribou, founded in 1992 and run by CEO Michael Tattersfield, has sought to expand its coffee brand recently by adding kiosks in retailers including Supervalu Inc.’s Jewel-Osco grocery stores.
Benckiser has “made the bet that coffee is a good spot,” said Kenneth Shea, a Bloomberg Industries analyst in Skillman, New Jersey. “It’s basically a recession-proof business -- coffee consumption continues to rise globally.”
Caribou surged 31 percent to $16.10 at the close in New York for the biggest gain since its initial public offering in 2005. The stock has increased 15 percent this year, while Starbucks Corp. has advanced 19 percent.
The coffee market “is an attractive industry with favorable long-term fundamentals, which is why we are in it,” Tom Johnson, a U.S.-based spokesman for JAB, said by e-mail. “Master Blenders is a minority and pure financial investment and we do not control or input into their strategy. For Peet’s and Caribou, we intend to maintain them as separate companies and management teams with their own brands and strategies, as we believe this will be the best road to success for both.”
BDT Capital Partners, based in Chicago, is a minority investor in the Caribou transaction, according to the statement.
Caribou’s revenue is forecast to rise 35 percent this year to $327 million, data compiled by Bloomberg shows, after a 15 percent drop to $242.3 million in 2011. There were 610 Caribou shops, including 202 franchised locations, as of Sept. 30.
JAB subsidiary Coty Inc. unsuccessfully attempted a takeover this year of door-to-door cosmetics seller Avon Products Inc. for more than $10 billion. Becht, also chairman of Coty, said then that the perfume maker would pursue other opportunities in light of Avon’s rejection.
“Initially JAB’s Coty was to be a consolidator in personal care, but now it seems JAB wants to be a coffee consolidator,” Pablo Zuanic, an analyst at Liberum Capital, said by e-mail.