Caribou Coffee Company, the second-largest company-owned premium coffeehouse operator in the United States based on the number of units, and the Joh. A. Benckiser Group (JAB) announced a definitive merger agreement under which an affiliate of JAB will acquire Caribou for $16 per share in cash, or a total of approximately $340.
The agreement, which has been unanimously approved by Caribou's independent directors, represents a premium of approximately 30 percent over Caribou's closing stock price on December 14, 2012, the last trading day prior to the announcement.
At the close of the transaction, Caribou will continue to be operated as an independent company with its own brand, management team, and growth strategy. Caribou will remain based in Minneapolis, Minnesota.
"Caribou Coffee is a great company with dedicated people, world-class customer service, exceptionally high-quality coffeehouse beverages and food, and a state-of-the-art roasting facility," says Gary Graves, non-executive chairman of Caribou. "The employees of Caribou should feel very proud of all they've been able to accomplish over the years, and I look forward to continued success in Caribou's future."
Michael Tattersfield, president and CEO of Caribou, says, "We anticipate the next chapter in Caribou's journey will be filled with tremendous opportunities to grow this great brand with new ownership."
Bart Becht, chairman of JAB, adds, "Caribou has a fantastic brand and unique culture and fits perfectly with JAB's investment philosophy of investing in premium and unique brands in attractive growth categories like coffee. JAB is committed to investing in Caribou as a standalone business out of Minneapolis to ensure the company continues its current highly successful track record."
Under the terms of the merger agreement, an affiliate of JAB will promptly commence a tender offer to acquire all of the outstanding shares of Caribou's common stock at a price of $16 per share in cash. Following successful completion of the tender offer, JAB will acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer.
The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of outstanding Caribou shares on a fully diluted basis, the expiration or termination of the waiting periods under applicable competition laws, and other customary conditions. The tender offer is not subject to a financing condition.
BDT Captial Partners, a Chicago-based merchant bank that provides long-term private capital solutions to closely held companies, is a minority investor in this transaction alongside JAB.
In addition to BDTCP's capital investment, BDT & Company served as a financial co-advisor to JAB with Morgan Stanley. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to JAB in this transaction. Moelis & Co LLC is serving as exclusive financial advisor to Caribou in connection with this transaction, and Briggs and Morgan P.A. is acting as Caribou's legal advisor.