Caribou Buyout: The Coffee Bull Market Continues!
ThinkstockCaribou Coffee Company Inc. (NASDAQ: CBOU) is being acquired. If you want proof that the retail coffee market is not a dead sector, all you have to do is consider that Caribou is the second-largest company-owned premium coffeehouse operator in…
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Caribou Coffee Company Inc. (NASDAQ: CBOU) is being acquired. If you want proof that the retail coffee market is not a dead sector, all you have to do is consider that Caribou is the second-largest company-owned premium coffeehouse operator in the United States, if you just base the calculation on the number of coffee shops.
The Joh. A. Benckiser Group is acquiring the company for $16.00 per share in cash, for a total sum of about $340 million. The agreement represents a premium of about 30% over Caribou’s most recent closing stock price of $12.32. One consideration we would note is that the 52-week range is $9.93 to $18.84. That being said, even if this is a 30% premium, some buyers may allege that the deal undervalues Caribou.
It is also important to recall that this Benckiser Group, a German firm, is the group which spent about $1 billion to acquire Peet’s Coffee & Tea Inc. So why is the tea and coffee bull not dead? You have to consider that Starbucks Corp. (NASDAQ: SBUX) is in the midst of acquiring Teavana Holdings Inc. (NYSE: TEA) in a deal worth close to $600 million.
Shares of Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) have not yet shown any interest in participating in the ongoing coffee bull market. Its shares are down 0.5% at $40.10 as its peak interest has, at least for now, come and gone.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
