Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) (“GMCR”) today
announced that it has acquired Diedrich Coffee, Inc. (NASDAQ: DDRX)
(“Diedrich Coffee”) for $35 per share of common stock in cash, pursuant
to a cash tender offer and a “short form” merger, in a transaction with
a total value of approximately $300 million.
GMCR’s tender offer for all outstanding shares of Diedrich Coffee common
stock expired at midnight, Eastern Time, on Monday, May 10, 2010. As of
the tender offer’s expiration time, approximately 5,446,334 shares had
been tendered and not properly withdrawn pursuant to the tender offer,
which represented approximately 95.06% of the outstanding shares as of
the tender offer’s expiration date. GMCR and the wholly owned subsidiary
through which it conducted the tender offer, Pebbles Acquisition Sub,
Inc. (“Purchaser”), accepted for payment all shares that were validly
tendered and not properly withdrawn, and paid for these shares in
accordance with the tender offer’s terms.
Subsequent to the tender offer, GMCR effected the merger of Purchaser
with and into Diedrich Coffee, with Diedrich Coffee being the surviving
corporation, on May 11, 2010. As a result of the merger, Diedrich Coffee
has become a wholly owned subsidiary of GMCR.
Lawrence J. Blanford, President and Chief Executive Officer of GMCR,
said, “We are pleased to welcome Diedrich Coffee to the GMCR family. We
believe this combination provides significant growth opportunities and
further advances GMCR’s objective of becoming a leader in the coffee and
coffeemaker businesses.”
Blanford continued, “By taking the next logical step beyond our already
successful licensing agreement with Diedrich Coffee, we are bringing in
house three strong, complementary brand platforms – Diedrich, Gloria
Jean’s and Coffee People – and augmenting the growing GMCR beverage
brand portfolio. In addition, we are gaining manufacturing and
distribution facilities in California, which will enable us to more
effectively reach consumers in this region.”
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 will be integrated into GMCR’s Specialty Coffee business
unit. The combined company will operate manufacturing and distribution
facilities in Waterbury and Essex, Vermont; Castroville, California;
Knoxville, Tennessee; Sumner, Washington; and Toronto, Ontario Canada.
As previously announced, 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.
GMCR also announced that it has amended its Amended and Restated
Revolving Credit Agreement to provide for a new term loan for $140
million, a new uncommitted revolver increase option of up to $100
million and increases in the permitted amounts of certain forms of
indebtedness and investments. In connection with the closing, GMCR
executed the $140 million new term loan to pay for a portion of the
Diedrich Coffee acquisition purchase price.
As of the close of trading on May 11, 2010, Diedrich Coffee's common
stock will no longer be traded on the NASDAQ Stock Exchange.
BofA Merrill Lynch is serving as financial advisor to GMCR on this
transaction and Ropes & Gray LLP is serving as its legal advisor.
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 Green
Mountain Coffee®, Newman’s
Own® Organics coffee, Tully’s
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 and brands, 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 and producing 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.
