Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) (“GMCR”)
today confirmed that it has submitted a proposal to acquire
Diedrich Coffee, Inc. (NASDAQ: DDRX) (“Diedrich”) for $30.00 per
share in cash pursuant to a cash tender offer, in a transaction
with a total enterprise value of approximately $247 million.
Separately, today Diedrich announced that the Board of Directors of
Diedrich had determined that the GMCR offer constituted a superior
proposal, as defined in the existing merger agreement between
Diedrich and Peet’s Coffee & Tea, Inc. (NASDAQ: PEET)
(“Peet’s”), to the November 2, 2009 Peet’s proposal. Diedrich also
announced today that is has received a revised offer from
Peet’s.
Under the terms of GMCR’s proposal, GMCR will acquire all of the
outstanding shares of Diedrich common stock for $30.00 per share in
cash, with no financing and no due diligence contingencies. GMCR
intends to fully finance this transaction through cash on hand and
GMCR’s existing bank lines of credit. This offer represents a 47%
premium to the closing market price of Diedrich common stock on
November 2, 2009, the last trading day prior to the public
announcement of a proposed merger agreement between Diedrich and
Peet’s, and a 15% premium over the original cash and stock proposal
from Peet’s. GMCR anticipates that this transaction will be neutral
to slightly accretive within the first twelve months following the
close, excluding one-time transaction expenses, and accretive
thereafter.
Lawrence J. Blanford, President and Chief Executive Officer of
GMCR, said, “We are pleased that Diedrich’s Board of Directors
determined that our all-cash offer constituted a superior proposal
to Peet’s November 2, 2009 proposal. We believe our offer provides
Diedrich shareholders with a substantial all-cash premium as well
as greater value and greater certainty than the cash and stock
proposal from Peet’s. We remain committed to this strategic
combination.”
Blanford continued, “We believe the combination with Diedrich
provides significant growth opportunities and further advances
GMCR’s objective of becoming a leader in the highly fragmented and
competitive coffee and coffee maker businesses. This transaction
will build upon the success of GMCR’s family of brands across North
America by enhancing our brand differentiation with an expanded
portfolio of fast-growing consumer offerings, and by taking
advantage of manufacturing, distribution and duplication of public
company cost synergies.
“Diedrich's has three coffee brand platforms which will be
complementary to GMCR's brands: Diedrich, Gloria Jean’s, and Coffee
People. The Diedrich brand offers strong Southern Californian
coffeehouse heritage and will work well alongside GMCR’s successful
Tully’s brand in the Pacific Northwest. Gloria Jean’s is a premium
coffee brand, widely known for its expertise in flavored coffees
and indulgent beverages, and is highly visible in malls where
Keurig brewers are sold. This is expected to broaden our flavored
coffee and dairy-based beverage offerings. The Coffee People brand
includes both straight-forward offerings like the successful Donut
Shop as well as more creative and innovative product offerings like
Jet Fuel, Wake-Up Call and Cowboy Coffee. These Coffee People
varieties expand the appeal of the Keurig system to a broader range
of coffee drinkers,” Blanford added.
“This combination will be a natural extension of the successful
Keurig licensed roaster partnership between our two companies. We
believe that an offering of meaningful brands is a key part to
driving the growth of the Keurig system and we are continually
evaluating ways to expand the brands we provide to consumers. To
that end, we have recently added the Mr. Coffee and Cuisinart
brands through brewer licenses; these join the Breville brand also
under license. Additionally, we maintain numerous and differing
license arrangements, which allow consumers to enjoy other
specialty coffee brands including Van Houtte, Newman's Own
Organics, Caribou, and Emeril's as well as specialty tea brands
Celestial Seasonings and Twinings all in K-Cup portion packs,”
Blanford continued.
“Diedrich also owns and operates manufacturing and distribution
facilities in Southern California which, upon completion of this
transaction, will enable us to more effectively reach consumers in
this region. These facilities will also complement the investments
we have made across our network and enable us to achieve our
objective of having high-quality manufacturing and distribution
assets strategically located across North America. The combined
company will have manufacturing and distribution assets in
Waterbury and Essex, Vermont, Knoxville, Tennessee, Seattle,
Washington, Castroville, California and Toronto, Canada,” Blanford
concluded.
GMCR has a track record of financial success coupled with
environmental and social responsibility. GMCR has delivered
double-digit net sales growth for the last 28 consecutive
quarters, and has seen accelerated net sales growth of greater than
39% for the most recent 13 consecutive quarters. GMCR has been
able to achieve this while still demonstrating its commitment to
making a positive difference in the world. GMCR offsets 100% of its
direct greenhouse gas emissions, invests in Fair Trade Certified™
coffee and donates at least 5% of its pre-tax profits to social and
environmental projects. GMCR has received numerous third party
recognitions over the years for both financial performance and how
it conducts business. Most recently, these honors have included
being #11 on Fortune’s annual list of the 100 Fastest Growing
Companies, Forbes 100 Most Trustworthy Companies and
recognition for GMCR’s corporate responsibility platform by CRO
Magazine.
BofA Merrill Lynch is serving as financial advisor to GMCR on
this transaction and Ropes & Gray LLP is serving as its legal
advisor.
About Green Mountain Coffee Roasters, Inc. (NASDAQ:
GMCR)
As a leader in the specialty coffee industry, Green Mountain
Coffee Roasters, Inc. is recognized for its award-winning coffees,
innovative brewing technology, and socially responsible business
practices. GMCR’s operations are managed through two business
units. The Specialty Coffee business unit produces coffee, tea and
hot cocoa from its family of brands, including Tully’s Coffee®,
Green Mountain Coffee®, Newman’s Own® Organics coffee and Timothy’s
World Coffee®. The Keurig business unit is a pioneer and leading
manufacturer of gourmet single-cup brewing systems. K-Cup® portion
packs for Keurig® Single-Cup Brewers are produced by a variety of
licensed roasters, including Green Mountain Coffee, Tully’s Coffee
and Timothy’s. GMCR supports local and global communities by
offsetting 100% of its direct greenhouse gas emissions, investing
in Fair Trade Certified™ coffee, and donating at least five percent
of its pre-tax profits to social and environmental projects. Visit
www.gmcr.com for more information.
Forward-looking statements
Certain statements contained herein, including GMCR’s intention
to complete the proposed acquisition, are not based on historical
fact and are “forward-looking statements” within the meaning of the
applicable securities laws and regulations. Generally, these
statements can be identified by the use of words such as
“anticipate,” “believe,”, “could,” “estimate,” “expect,” “feel,”
“forecast,” “intend,” “may,” “plan,” “potential,” “project,”
“should,” “would,” “and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Owing to the
uncertainties inherent in forward-looking statements, actual events
or results could differ materially from those stated herein.
Factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, the impact on sales and profitability of consumer
sentiment in this difficult economic environment, GMCR’s success in
efficiently expanding operations and capacity to meet growth,
GMCR’s success in efficiently and effectively integrating Tully’s
and Timothy’s wholesale operations and capacity into its Specialty
Coffee business unit, GMCR’s success in introducing new product
offerings, the ability of lenders to honor their commitments under
GMCR’s credit facility, competition and other business conditions
in the coffee industry and food industry in general, fluctuations
in availability and cost of high-quality green coffee, any other
increases in costs including fuel, Keurig’s ability to continue to
grow and build profits with its roaster partners in the At Home and
Away from Home businesses, the impact of the loss of major
customers for GMCR or reduction in the volume of purchases by major
customers, delays in the timing of adding new locations with
existing customers, GMCR’s level of success in continuing to
attract new customers, sales mix variances, weather and special or
unusual events, as well as other risks described more fully in
GMCR’s filings with the U.S. Securities and Exchange Commission
(the "SEC"). Forward-looking statements reflect management’s
expectations as of the date of this press release, and are subject
to certain risks and uncertainties. GMCR does not undertake to
revise these statements to reflect subsequent developments, other
than in its regular, quarterly earnings releases.
Additional Information
The tender offer to purchase shares of Diedrich common stock
referenced in this press release has not yet commenced, and this
press release is neither an offer to purchase, nor a solicitation
of an offer to sell, any securities. The tender offer to purchase
shares of Diedrich common stock will be made only pursuant to a
Tender Offer Statement on Schedule TO containing an offer to
purchase, forms of letters of transmittal and other documents
relating to the tender offer (the "Tender Offer Statement"), which
GMCR will file with the SEC and mail to Diedrich stockholders.
Security holders of Diedrich are advised to read the Tender Offer
Statement when it becomes available, because it will contain
important information about the tender offer. Investors and
security holders of Diedrich also are advised that they may obtain
free copies of the Tender Offer Statement and other documents filed
by GMCR with the SEC (when these documents become available) on the
SEC's website at http://www.sec.gov. In addition, free copies of
the Tender Offer Statement and related materials may be obtained
(when these documents become available) from GMCR by written
request to: Green Mountain Coffee Roasters, Inc., Attention:
General Counsel, 33 Coffee Lane, Waterbury, Vermont 05676.
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