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withdrawn pursuant to the tender offer, which represented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validly tendered and not properly withdrawn, and paid for these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.
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 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.
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