JAB Holding Company, the German investor behind Panera Bread, is merging Peet’s Coffee and Jacobs Douwe Egberts into a single coffee and tea company, with plans to seek an initial public share offering and begin trading on the stock market.
The new entity—JDE Peet’s—will cover 140 countries and account for combined sales of $7.81 billion. Jacobs Douwe Egberts is a European packaged-coffee giant that runs Jacobs Coffee, Douwe Egberts, Senseo, and Tassimo. JDE Peet’s will also include the Moccona, Kenco, Pickwick, and Pilão brands.
In a statement Tuesday, JAB said the company would represent a category powerhouse with high growth potential. It will blanket the beverage industry with on-demand systems and stores, not unlike Starbucks, which reported sales of $26.5 billion in the year through September 29.
JDE Peet’s will contend with Nestlé, too, the world’s largest packaged-coffee business that struck a $7.15 billion deal with Starbucks last year for the global rights to sell its branded products at supermarkets and other retail venues, including capsules for Nespresso machines. Nestlé recorded $19 billion in global coffee sales this year, including contribution from Starbucks’ line.
JAB, which bought Panera for $7.5 billion in April 2017 and also owns Krispy Kreme, Caribou Coffee Company, Einstein Noah Restaurant Group, Pret A Manger, and Keurig Dr Pepper, said the exploration of an IPO marked “a key milestone in the partnership between Acorn Holdings B.V. [which includes controlling shareholder JAB and BDT Capital] and Mondelez International.” JAB acquired Peet’s Coffee in 2012 for $977.6 million. It bought Jacobs Douwe Egberts for $9.8 billion a year later. In 2014, the company merged Jacobs Douwe Egberts with the coffee businesses of Mondelez International to create JDE. Mondelez holds a 26 percent stake.
As part of the move, Peet’s Coffee chief executive Casey Keller will become CEO of JDE Peet’s, effective January 2020. Frederic Larmuseau, who stepped down from his role as CEO of Jacobs Douwe Egberts, will remain at JDE as a special adviser to the board and the CEO.
Olivier Goudet, chairman of Jacobs Douwe Egberts and chairman of Peet’s Coffee, said in a statement, “We are proud of what we have accomplished at JDE and Peet’s but believe with our IPO the best years of growth and shareholder value creation are ahead of us with our newly combined company.”
Keller has led Peet’s Coffee since 2018. He previously worked at P&G, Heinz, Mars Wrigley, and Alberto Culver.
JAB said the IPO should be completed sometime during 2020, depending on market conditions. JAB will remain the controlling shareholder. It did not say how large a stake it would sell, where it would list the company, or what valuation it was seeking.
Per The Financial Times, however, JAB plans to float a stake worth about $3.335 billion on Amsterdam’s Euronext.
Peet’s Coffee, founded 1966 in Berkeley, California, opened its first store in Seattle in 1971. It currently owns majority stakes in artisanal coffee brands Intelligentsia and Stumptown through acquisitions under JAB.
It has brick-and-mortar locations in eight states (California, Colorado, Illinois, Massachusetts, Maryland, Oregon, Virginia, Washington, and Washington, D.C.), but sells ready-to-drink coffee products in 15,000 grocery and C-stores nationwide. The vast majority are in California.