Ynna Carino September 11, 2013
Hello, hump day! For those of you who brave the world without caffeine, congratulations. I am not one of you. And I’m not alone, as 83% of Americans claimed to drink coffee in the past year, according to the National Coffee Association of U.S.A.’s National Coffee Drinking Trends. That’s a whole lot of people drinking a whole lot of coffee, and private equity has seized the opportunity, pouring capital into the companies that help us get our hands on a cup of joe, whether at home, at work or somewhere in-between.
Often times that somewhere in-between winds up being a coffeehouse or café. For example, Dunkin’ Brands, which by size tops the list of coffee-related companies that have received backing from U.S. PE investors, was acquired by The Carlyle Group, Bain Capital and Thomas H. Lee Partners in a $2.4 billion buyout in 2006. The trio of investors enjoyed a $500 million dividend in 2010 and eventually took the QSR franchisor public in 2011 in a roughly $423 million IPO that valued the company at $2.4 billion. Other U.S.-based coffee spots that have been visited by PE investors include Minnesota-based Caribou Coffee, California-based Philz Coffee and Pennsylvania-based Saxbys Coffee. Beyond the U.S., India’s Café Coffee Day and China’s DIO F&B Group have also received PE backing.
However, deals for coffee shops aren’t the only coffee investments U.S. PE firms have brewed up. Coffee service companies have been a big draw for investors, with 45 such companies being the target in deals. Additionally, investors have backed coffee roasters such as Van Houtte and coffee packaging companies such as BriteVision, which provides coffee sleeve advertising. All in all, U.S. private equity investors have invested in a total of 172 coffee-related companies across five continents over the years.
But, coffee isn’t for everyone. If you’re one to bypass coffee and head straight to the tea for your caffeine fix, private equity has you covered too. U.S. PE investors have completed 83 deals with tea-related companies, including Teavana and Honest Tea.