Benckiser Group Agrees to Pay $340 Million for Caribou Coffee

Andrew Klips |

Joh A. Benckiser, the investment vehicle for the uber-rich Reimann family of Germany, is looking to keep a steady pace of acquisitions of trendy brands.  On Monday, Benckiser agreed to $340 million in cash to buy Caribou Coffee Co., Inc. (CBOU), following its purchase of Peet’s Coffee & Tea Inc., one of the U.S.’s oldest specialty coffee purveyors, in July for $974 million.

The $16 per share deal for Minneapolis, Minnesota-based Caribou is approximately a 30 percent premium to the $12.32 closing price of shares of CBOU on Friday.

Based on the number of coffeehouses, Caribou is the second largest company-owned premium coffeehouse operator in the U.S.  As of September 30, 2012, the Caribou had 610 coffeehouses, including 202 franchised locations, in 22 states, the District of Columbia and ten international markets.

Founded in 1992, Caribou competes with companies like Starbucks Corp. (SBUX) and Dunkin’ Brands Group Inc. (DNKN).

Benckiser, whose portfolio already contains household products making giant Reckitt Benckiser, women’s shoemaker Jimmy Choo and cosmetic maker Coty, is making moves to establish an even strong product base in the States.  It was Benckiser that provided financial backing in Coty’s high-profile attempt to acquire Avon Products, Inc. (AVP) for $10.7 billion.  Coty withdrew its bid to buy the embattled rival in May to pursue other opportunities.

Caribou’s independent directors have unanimously approved the acquisition.

“We anticipate the next chapter in Caribou’s journey will be filled with tremendous opportunities to grow this great brand, with new ownership,” said Michael Tattersfield, President and Chief Executive Officer of Caribou.

Upon completion of the transaction, Caribou will be run as an independent company by its existing management team and will remain based in Minneapolis.

Chicago, Illinois-based BDT Capital Partners, a Chicago-based merchant bank run by a former Goldman Sachs exec Byron D. Trott that provides long-term private capital solutions to closely held companies, is a minority investor in this transaction alongside Benckiser.  BDT took a similar position when Benckiser bought Peet’s.

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Companies

Symbol Name Price Change % Volume
DNKN Dunkin\' Brands Group Inc. 50.68 0.26 0.52 1,364,641
SBUX Starbucks Corporation 53.45 -0.53 -0.98 11,993,515

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