Javo Beverage Company, a manufacturer of dispensed coffee and tea beverages, has disclosed an investment in the company by Falconhead Capital. The $12.5 million capital infusion was made through a private placement of subordinated notes paying 10% annually, as well as 50 million shares of common stock. Javo paid off a $5 million working capital loan from Wells Fargo using the new capital.
Since 2006 there have been 36 other beverage company investments by private equity firms. So far in 2009, the only private equity investor in beverages has been KPS Capital Partners. The firm formed North American Breweries in February, which subsequently purchased Labatt USA, High Falls Brewing and Pernod Ricard USA's Seagram assets. Javo also is only the ninth minority investment in the sector by private equity investors, who clearly prefer LBOs and add-on acquisitions when making beverage company investments.