SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
DIEDRICH COFFEE, INC.
(Name of Subject Company)
DIEDRICH COFFEE, INC.
(Name of Person Filing Statement)
COMMON STOCK,
$0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
253675201
(CUSIP Number of Class of Securities)
Sean M. McCarthy
Chief Financial Officer
28 Executive Park, Suite 200, Irvine, CA 92614
(949) 260-1600
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of
the person filing statement)
Copies to:
John M. Williams
Gibson, Dunn & Crutcher LLP
3161 Michelson Drive, Suite 1200
Irvine, California 92612
(949) 451-3800
x
|
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
|
PEETS COFFEE & TEA ANNOUNCES DEFINITIVE AGREEMENT TO
ACQUIRE DIEDRICH COFFEE IN CASH-AND-STOCK TRANSACTION
Combination of Diedrich with Peets 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
Peets Coffee &
Tea, Inc. (NASDAQ: PEET) and Diedrich Coffee, Inc. (NASDAQ: DDRX) announced today that they have entered into a definitive agreement under which Peets 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 Peets leading position in the specialty coffee and tea market, with premium quality brands in every segment of the category.
With this acquisition, Peets 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 Peets 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
®
for Keurig Incorporateds top selling single-cup brewing system through a license with
Keurig. As a part of the transaction, Peets will acquire Diedrichs portfolio of brands including Diedrich Coffee, Coffee People and the single serve rights to the nationally recognized Gloria Jeans coffee brand. Peets will
also be acquiring Diedrichs roasting and packaging facility capable of roasting and packaging unflavored and flavored coffees, with significant current and future K-Cup production capacity.
Upon closing, Diedrichs business will immediately benefit from the infrastructure that Peets 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 weve built the organization, roasting plant, IT and DSD sales infrastructure to expand the Peets brand into homes across the country without compromising our
distinctive quality and superior freshness standards, said Patrick ODea, President and CEO of Peets. This has driven a 42% compound annual growth rate in our packaged coffee business during that time and solidified
Peets 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 Diedrichs high-growth K-Cup business, said ODea.
Together, Diedrich and Peets will create new growth opportunities for Diedrichs 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 Peets 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 Peets subsidiary into Diedrich. For each share of Diedrich common stock tendered and accepted in the exchange offer or
converted in the merger, Peets will pay a combination of $17.33 in cash and a fraction of a share of Peets common stock having a value (based on the trading price of Peets 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 Peets 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 Peets common stock. Upon completion of the second-step merger, Diedrich will become a wholly-owned subsidiary of Peets. Mr. Heeschen and other directors and executive officers of Diedrich
have signed stockholder agreements in favor of Peets 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. Peets 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
Peets 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, Peets 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 Commissions 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 Peets by mail to Peets 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
Peets 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 Peets and the directors and executive officers of Diedrich may be deemed to be participants in
Peets solicitation of Diedrichs 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 Peets 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 Peets Coffee & Tea, Inc.
Peets 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., Peets 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. Peets is committed to strategically growing its business
through many channels while maintaining the extraordinary quality of its coffees and teas. For more information about Peets 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 worlds highest quality coffees. The company markets its three leading brands
of specialty coffees, Diedrich Coffee, Coffee People and Gloria Jeans Coffees, through office coffee service distributors, restaurants and specialty retailers, and via the companys web stores. Diedrich Coffee is one of only four roasters
under license to produce K-Cups for Keurig Incorporateds 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 managements beliefs, as well as assumptions made by and information currently available to management, including financial and operational information, the companys stock price volatility, and current competitive conditions. As a
result, these statements are subject to various risks and uncertainties. The companys 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 companys 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 companys 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 Peets 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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