FILED BY
PEET’S COFFEE & TEA, INC.
PURSUANT
TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND
DEEMED FILED PURSUANT TO RULE 14d-2
UNDER THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT
COMPANY: DIEDRICH COFFEE, INC.
COMMISSION
FILE NO. 000-
21203
PEET’S
COFFEE & TEA ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE DIEDRICH COFFEE IN
CASH-AND-STOCK TRANSACTION
Combination
of Diedrich with Peet’s Formidable Growth Infrastructure Expected to Accelerate
K-Cup Single Cup Market Growth
Companies
to Host Conference Call and Webcast at 3:00 PM Pacific Time Today
Emeryville, CA – November 2,
2009
-- Peet's Coffee & Tea, Inc. (NASDAQ: PEET) and Diedrich Coffee,
Inc. (NASDAQ: DDRX) announced today that they have entered into a definitive
agreement under which Peet’s will acquire Diedrich in a cash-and-stock
transaction valued at $26.00 per share or a total value of approximately $213
million. The acquisition will further solidify Peet’s leading position in the
specialty coffee and tea market, with premium quality brands in every segment of
the category.
With this
acquisition, Peet’s will enter the rapidly growing single cup coffee market with
strong specialty coffee brands helping to drive household penetration of the
K-Cup brewer system by leveraging Peet’s infrastructure and
direct-store-delivery selling system. Diedrich, a wholesale coffee roaster and
distributor, is almost exclusively focused on the production and sale of
K-Cups(R) for Keurig Incorporated’s top selling single-cup brewing system
through a license with Keurig. As a part of the transaction, Peet’s
will acquire Diedrich’s portfolio of brands including Diedrich Coffee, Coffee
People and the single serve rights to the nationally recognized Gloria Jean’s
coffee brand. Peet’s will also be acquiring Diedrich’s roasting and
packaging facility capable of roasting and packaging unflavored and flavored
coffees, with significant current and future K-Cup production
capacity.
Upon
closing, Diedrich’s business will immediately benefit from the infrastructure
that Peet’s has developed to support large scale, national growth of its premium
quality coffees, including its freshness-sensitive direct store delivery (DSD)
selling and merchandising system to grocery stores.
“Over the
past 7 years we’ve built the organization, roasting plant, IT and DSD sales
infrastructure to expand the Peet’s brand into homes across the country without
compromising our distinctive quality and superior freshness standards,” said
Patrick O’Dea, President and CEO of Peet's. “This has driven a 42% compound
annual growth rate in our packaged coffee business during that time and
solidified Peet’s position as the premier quality specialty coffee
brand.”
“Consistent
with our vision to be the gold standard specialty coffee company with leading
premium quality brands in every segment of the category, we recently launched a
line of premium Godiva coffees in the medium roast and flavored segments with
excellent sell-in success. The Diedrich acquisition represents
another major strategic growth initiative for our consumer packaged coffee
business, by entering and driving adoption of the single cup segment through
Diedrich’s high-growth K-Cup business,” said O’Dea.
“Together,
Diedrich and Peet’s will create new growth opportunities for Diedrich’s brands
and further drive household penetration of the K-Cup market” said Diedrich
chairman Paul Heeschen. “As a result, this combination benefits
shareholders of both companies, customers, employees and our K-Cup business
partners. Our already strong K-Cup business will accelerate under
Peet’s in a way we could not achieve alone,” said Heeschen.
Upon
completion, the transaction will provide Diedrich shareholders with cash, as
well as the opportunity for continued ownership of an interest in the combined
company through the stock component of the purchase price. The acquisition is
structured as a two-step transaction consisting of an exchange offer for all of
the outstanding shares of Diedrich common stock followed by a merger of a Peet’s
subsidiary into Diedrich. For each share of Diedrich common stock tendered and
accepted in the exchange offer or converted in the merger, Peet’s will pay a
combination of $17.33 in cash and a fraction of a share of Peet’s common stock
having a value (based on the trading price of Peet’s common stock over a
designated period prior to the completion of the exchange offer) of
approximately $8.67, but such fraction will not exceed 0.315 of a share of
Peet’s common stock. Outstanding warrants and options to acquire
Diedrich common stock will also be converted into the right to receive a
combination of cash and shares of Peet’s common stock. Upon
completion of the second-step merger, Diedrich will become a wholly-owned
subsidiary of Peet’s. Mr. Heeschen and other directors and executive
officers of Diedrich have signed stockholder agreements in favor of Peet’s
committing to tender into the exchange offer shares of Diedrich common stock
representing in excess of 32% of the total outstanding common stock of
Diedrich.
The
acquisition has been unanimously approved by the board of directors of each
company and is subject to regulatory approval and certain other closing
conditions. Peet’s will finance the acquisition through a combination
of cash on hand (at both companies) and $140 million of committed debt
financing. The acquisition is expected to be dilutive to earnings in
2010 and accretive thereafter. The exchange offer is currently
expected to close by end of the calendar year 2009.
Conference Call
Information
Peet’s
will host a conference call beginning at 3:00 p.m. PT/ 6:00 p.m. ET today,
November 2, 2009, which can be accessed by calling 1- 888-
339-3543. The call will simultaneously be webcast at
www.peets.com
.
A replay
of the teleconference will be available from 6:00 p.m. PT / 9:00 p.m. ET on
November 2, 2009 until 9:00 p.m. PT /12:00 a.m. ET on November 9, 2009, at
1-888-203-1112 or 1-719-457-0820, using access code 9774911.
Additional Information and
Where to Find It
The
exchange offer for the outstanding common stock of Diedrich referred to in this
press release has not yet commenced. This announcement is neither an
offer to purchase nor a solicitation of an offer to sell shares of Diedrich.
Diedrich shareholders are urged to read the relevant exchange offer documents
when they become available because they will contain important information that
shareholders should consider before making any decision regarding tendering
their shares. At the time the offer is commenced, Peet’s will file exchange
offer materials with the U.S. Securities and Exchange Commission and Diedrich
will file a Solicitation/Recommendation Statement with respect to the offer. The
exchange offer materials (including a Prospectus and certain other offer
documents) and the Solicitation/Recommendation Statement will contain important
information, which should be read carefully before any decision is made with
respect to the exchange offer. The Prospectus and certain other offer documents,
as well as the Solicitation/Recommendation Statement, will be made available to
all shareholders of Diedrich at no expense to them. The exchange offer materials
and the Solicitation/Recommendation Statement will be made available for free at
the Commission’s web site at
www.sec.gov
. Free
copies of the Offer to Purchase, the related Letter of Transmittal and certain
other offering documents will be made available by Peet’s by mail to Peet’s
Coffee & Tea, Inc., 1400 Park Avenue, Emeryville, CA 94608, attention:
Investor Relations, and free copies of the Solicitation/Recommendation Statement
will be made available by Diedrich by mail to Diedrich Coffee, Inc., 28
Executive Park, Suite 200, Irvine, CA 92614, attention: Investor
Relations.
Interests of Certain Persons
in the Offer and the Merger
Peet’s
will be, and certain other persons may be, soliciting Diedrich shareholders to
tender their shares into the exchange offer. The directors and executive
officers of Peet’s and the directors and executive officers of Diedrich may be
deemed to be participants in Peet’s solicitation of Diedrich’s shareholders to
tender their shares into the exchange offer.
Investors
and shareholders may obtain more detailed information regarding the names,
affiliations and interests of the directors and officers of Peet’s and Diedrich
in the exchange offer by reading the Prospectus and certain other offer
documents, as well as the Solicitation/Recommendation Statement, when they
become available.
About Peet’s Coffee &
Tea, Inc.
Peet's
Coffee & Tea, Inc., (NASDAQ: PEET), is the premier specialty coffee and tea
company in the United States. Founded in 1966 in Berkeley, California
by Alfred Peet, an early tea authority who became widely recognized as the
grandfather of specialty coffee in the U.S., Peet's offers superior quality
coffees and teas in multiple forms, by sourcing the best quality coffee beans
and tea leaves in the world, adhering to strict high quality and taste
standards, and controlling product quality though its unique direct store
delivery selling and merchandising system. Peet's is committed to
strategically growing its business through many channels while maintaining the
extraordinary quality of its coffees and teas. For more information about Peet's
Coffee & Tea, Inc. visit www.peets.com.
About Diedrich
Coffee
With
headquarters in Irvine, California, Diedrich Coffee (NASDAQ: DDRX) specializes
in sourcing, roasting and selling the world's highest quality coffees. The
company markets its three leading brands of specialty coffees, Diedrich Coffee,
Coffee People and Gloria Jean's Coffees, through office coffee service
distributors, restaurants and specialty retailers, and via the company's web
stores. Diedrich Coffee is one of only four roasters under license to produce
K-Cups for Keurig Incorporated's top-selling single-cup brewing system. For more
information about Diedrich Coffee, call 800-354-5282 or go to:
www.diedrich.com
,
www.coffeepeople.com
or
www.coffeeteastore.com
.
Forward
Looking Statements
This
press release contains statements that are not based on historical fact and are
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include
statements relating to anticipated purchase, future dilution and accretion and
the anticipated closing timing of the transaction. Forward-looking statements
are based on management’s beliefs, as well as assumptions made by and
information currently available to management, including financial and
operational information, the company’s stock price volatility, and current
competitive conditions. As a result, these statements are subject to
various risks and uncertainties. The company’s actual results could differ
materially from those set forth in forward-looking statements depending on a
variety of factors including, but not limited to, general economic conditions,
including the current recession and its ongoing negative impact on consumer
spending, the company’s ability to implement its business strategy, attract and
retain customers, and obtain and expand its market presence in new geographic
regions; the availability and cost of high quality Arabica coffee beans;
consumers’ tastes and preferences; complaints or claims by current, former or
prospective employees or government agencies; and competition in its market as
well as other risk factors as described more fully in the company’s filings with
the Securities and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 28, 2008. These factors may not be
exhaustive. The company operates in a continually changing business
environment, and new risks emerge from time to time. Any forward-looking
statements speak only as of the date of this press release.
Contacts:
For
Peet’s Coffee & Tea:
Paul
Kranhold/Diane Henry
Sard
Verbinnen & Co
415-618-8750
For
Diedrich:
Scott
Liolios
The
Liolios Group
949-574-3860
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