La Colombe, the US coffee business, has been sold to Chobani, the food and beverage group best known for its Greek-style yogurt.
The deal, announced today (15 December) and struck for US$900m, sees two assets controlled by Hamdi Ulukaya come together.
Ulukaya, Chobani’s founder and CEO, set up the yogurt maker in 2005. He invested in La Colombe, which was established in 1994, in 2015.
The transaction will also see US coffee giant Keurig Dr Pepper convert its shareholding in La Colombe for an undisclosed stake in Chobani.
Keurig Dr Pepper, which became La Colombe’s distributor when it invested in the Philadelphia business earlier this year, will continue to handle its products.
“At a time where the industry has faced challenges to grow sales, Chobani has delivered double-digit, volume-led sales growth, and considerable margin expansion. We have never been stronger or better positioned to chart our next chapter of growth,” Ulukaya said, without citing figures.
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“We’ve already made an investment in the coffee category with our creamers and are excited about bringing La Colombe into the Chobani family, and offering the delicious, high-quality cold brew and ready-to-drink craftmanship of La Colombe to a next generation of consumers, powered by a strong distribution partner in KDP.”
Under the terms of the deal that have been announced, Chobani has financed the acquisition with a newly-issued $550m loan, cash and the exchange of Keurig Dr Pepper’s stake in La Colombe.
The Keurig coffee owner paid $300m for a 33% stake in La Colombe earlier this year, becoming its second-largest investor behind majority shareholder Ulukaya. As well as selling RTD and pod coffee products, La Colombe also has on-premise sites in New York, Texas, Chicago, California, Maryland and Philadelphia.
Keurig Dr Pepper chairman and CEO Bob Gamgort, who is set to step down as chief executive next year, outlined the growth he saw laying ahead for La Colombe.
“La Colombe is a unique brand and well positioned to continue its strong growth trajectory, including upside as its ready-to-drink line expands availability through our company-owned DSD [direct-store distribution] network and with premium K-Cup pods now in the market,” Gamgort said. “Both as a strategic partner and a minority shareholder, we are excited by the path ahead.”
In September last year, Chobani, which already has oatmilk, Greek-style yogurt drinks and probiotic beverages in its portfolio, abandoned plans for an IPO, blaming trading conditions for the decision.