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| Krishna Kumar: Upbeat |
Mumbai, June 25: Tata Coffee Ltd, the subsidiary of Tata Tea, is acquiring Eight ’ Clock Coffee Co (EOC) of the US from Gryphon Investors at a cost of $220 million (Rs 1,015 crore).
EOC has over 100 years of brand history and retail coffee experience in the US. It occupies the top slot in the branded whole bean market and is the category leader in the value gourmet segment. Headquartered in Montvale, New Jersey, the company operates its roasting and packaging facility in Landover, Maryland. In 2005, it had net sales of $109 million (Rs 505 crore).
Tata Coffee said EOC provides a sizeable entry platform and an established brand to the company in the US coffee market whose size is estimated at $21 billion.
The acquisition will be financed through a combination of equity and non-recourse debt. It will transform Tata Coffee from a regional to a global player with strong brands in international markets, including the US.
“This acquisition is in line with Tata Coffee’s objective to move up the value chain and become a leading and fully integrated player in the global coffee industry,” a company statement said.
Tata Coffee added that this is in line with the plan of Tata Tea to become a global beverage player. It follows a string of acquisitions by the group, including Tetley globally, Good Earth in the US and JEMCA in Czech Republic. After this acquisition, the group will have significant scale in important markets of Asia, Europe and North America. JP Morgan acted as the exclusive financial adviser for this acquisition. The funding is being arranged by Rabo Bank.
R.K. Krishna Kumar, chairman, Tata Coffee said, “Tata Tea is one of the fastest growing beverage companies in the world and, by the end of the decade, we expect the group, including Tata Tea, Tetley, Tata Coffee and Eight ’ Clock Coffee, to become one of the largest and most admired beverage players in the world.”
M.H. Ashraff, managing director of Tata Coffee, said, “This acquisition is a strategic fit with our growth plans and helps Tata Coffee attain its objective of becoming an international and fully integrated player.”
