GMCR Acquires Timothy’s Coffees
Published:16-November-2009
By Staff Reporter
Revises estimates, as a result of the acquisition
Green Mountain Coffee Roasters (GMCR), an operator of coffee business units, has acquired Timothy’s Coffees from an affiliate of Sun Capital Partners for a cash purchase price of approximately $157m subject to adjustment.
The company said that the acquisition includes the Timothy’s coffee brand and wholesale business and will be maintained as a wholly owned Canadian subsidiary, with operations integrated into GMCR’s Specialty Coffee Business Unit. GMCR anticipates the acquisition will be accretive to its earnings per share in fiscal year 2010.
The company’s has revised estimates, as a result of the Timothy’s acquisition. It now estimates total consolidated net sales growth of 55% to 60%, up from prior estimates of 50% to 55% and an operating margin in the range of 11.5% to 12%, up from previous estimates of 11.2% to 11.7%. Fully diluted GAAP earnings per share in the range of $1.85 to $1.95 per share, up from prior estimates of $1.75 to $1.85 per share.
Other estimates, such as system-wide K-Cup Growth rates, remain unchanged from estimates released by GMCR on November 11, 2009 when it released fiscal 2009 results.
Revised estimates for first quarter fiscal year 2010 includes total consolidated net sales growth of 65% to 70%, up from prior estimates of 61% to 66%, an operating margin in the range of 4% to 4.5%, up from prior estimates of 3.8% to 4.3% and fully diluted GAAP earnings per share in the range of $0.12 to $0.16, up from prior estimates of $0.11 to $0.15 per share.
Lawrence Blanford, president and chief executive officer of GMCR said: “This acquisition will provide GMCR with a Canadian presence and a coffee roasting facility in Toronto. It will accelerate GMCR’s geographic expansion with a Canadian brand platform that includes manufacturing and distribution synergies.
"The retail portion of the Timothy’s business has been purchased by Bruegger’s Enterprises and will continue to support the Timothy’s brand across Canada. Our acquisition includes a five-year coffee supply agreement with Bruegger’s Canadian affiliate and we look forward to our expanding relationship with them as we already supply all of their 290 locations in the US.”
