Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) (“GMCR”)
today announced that it has entered into a definitive merger
agreement to acquire Diedrich Coffee, Inc. (NASDAQ: DDRX)
(“Diedrich”) for $35 per share in cash pursuant to a cash tender
offer, in a transaction with a total value of approximately $290
million.
Concurrent with entering into the merger agreement with GMCR,
Diedrich terminated its previously announced merger agreement with
Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) (“Peet’s”) (the “Prior
Agreement”) following the expiration of the negotiation period
granted to Peet’s under the terms of the Prior Agreement. In
accordance with the terms of the Prior Agreement, on behalf of
Diedrich, GMCR paid a termination fee of $8,517,000 to Peet’s in
connection with such termination.
Lawrence J. Blanford, President and Chief Executive Officer of
GMCR, said, “We are delighted to have entered into a definitive
merger agreement with Diedrich and look forward to realizing the
substantial benefits of this transaction. This combination further
advances our objective of becoming a leader in the highly
fragmented and competitive coffee and coffee maker businesses and
provides significant growth opportunities for GMCR stakeholders. In
particular, adding Diedrich’s three strong brand platforms, which
are highly complementary to GMCR’s brands, as well as its
manufacturing and distribution facilities in California will, upon
completion of this transaction, enable us to more effectively reach
consumers across North America and do so with an enhanced array of
coffee choices.”
Paul C. Heeschen, Chairman of the Board of Diedrich, said, “We
are pleased to have reached this agreement with GMCR. This
transaction maximizes value for our shareholders and is expected to
bring new opportunities for both our employees and brands to grow
as part of a stronger business platform. We want to express our
appreciation to our employees. Their hard work and dedication has
been instrumental in building this great company. We look forward
to working with GMCR to ensure a smooth transition and complete the
transaction as expeditiously as possible.”
Under the terms of the merger agreement, GMCR will acquire all
of the outstanding shares of Diedrich common stock for $35 per
share in cash pursuant to a cash tender offer, 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. The full terms and conditions of the GMCR offer
will be contained in the Schedule TO which is expected to be filed
with the U.S. Securities and Exchange Commission later this week.
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.
The transaction is subject to customary closing conditions,
including, among others, regulatory approvals. GMCR noted that it
has thoroughly evaluated this transaction and is confident it can
consummate the transaction promptly in early 2010. In that regard,
the merger agreement includes a graduated reverse break-up fee
structure such that the reverse break-up fee starts at $8,517,000
for a termination prior to February 15, 2010 and increases by
$1,000,000 in each subsequent 60 day period through June 15, 2010,
in each case payable by GMCR to Diedrich in the unlikely event that
regulatory approvals are not obtained under the terms and
conditions of the merger agreement.
BofA Merrill Lynch is serving as financial advisor to GMCR on
this transaction and Ropes & Gray LLP is serving as its legal
advisor. Houlihan, Lokey, Howard & Zukin Capital, Inc. is
serving as financial advisor to Diedrich Coffee and Gibson, Dunn
& Crutcher LLP is serving as 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.
GMCR routinely posts information that may be of importance to
investors in the Investor Services section of its website,
including news releases and its complete financial statements, as
filed with the SEC. The Company encourages investors to consult
this section of its website regularly for important information and
news. Additionally, by subscribing to the Company’s automatic email
news release delivery, individuals can receive news directly from
GMCR as it is released.
About Diedrich Coffee, Inc. (NASDAQ: DDRX)
Diedrich Coffee 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 the few 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
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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