Gryphon Investors, a San Francisco-based private equity firm, confirmed that it has signed an agreement to sell its portfolio company, Montvale, New Jersey-based Eight O’Clock® Coffee Company, to Tata Coffee Ltd., headquartered in India. The transaction is expected to close promptly following anti-trust clearance under the Hart-Scott-Rodino Act. The terms of the deal were not disclosed.
An investor group led by Gryphon acquired a majority stake in Eight O’Clock from The Great Atlantic & Pacific Tea Company (A&P) in November, 2003. Two dividend recapitalizations were completed, one in November, 2004 and one in November, 2005.
“As we explored strategic alternatives for Eight O’Clock Coffee, we were fortunate that numerous parties were interested in owning the business. Tata ultimately distinguished itself across several parameters and was well-respected by EOC management,” said Kurt Kaull, Partner and Head of Gryphon’s Consumer & Retail Group. “Since first identifying EOC as an under-managed consumer products brand two and a half years ago, Gryphon has worked closely with EOC management to build the business rapidly and to improve operations dramatically, which has enabled us to complete two dividend recapitalizations in two years. We are delighted that this sale has resulted in an outcome that is very attractive for our limited partners and the EOC management team.”
Barbara Roth, President and Chief Executive Officer of Eight O’Clock Coffee, said, “On behalf of the management team and all of the employees at Eight O’Clock Coffee, I am excited to embark under Tata’s ownership on the next phase of our company’s rich history. Gryphon has been a truly value-added partner during its ownership period and we have accomplished a great deal together, having transformed ourselves into a stand-alone consumer packaged goods company with a leading position in the attractive niche of value gourmet coffee. We look forward to joining Tata’s strong global organization and are enthusiastic about our growth prospects for the future.”
“It is rewarding to see Tata and other parties expert in the consumer packaged goods arena recognize the end result of EOC management and Gryphon’s hard work over the past few years, including the enhanced positioning of the Eight O’Clock brand, improved manufacturing, established operating infrastructure, and increased penetration into multiple distribution channels,” commented Will Lynn, Partner and Head of the Gryphon Operations Resources Group. “We are proud of the meaningful transformation that EOC has made under our stewardship from essentially an orphaned brand into a strong, stand-alone consumer packaged goods company.”
Banc of America Securities LLC acted as financial advisor for Eight O’Clock Coffee and Gryphon Investors for the transaction, while Kirkland & Ellis provided legal counsel.
About Eight O’Clock Coffee
Eight O’Clock Coffee is a leading manufacturer, distributor, and marketer of coffee in the United States. The company has a particular strength as the largest branded player in the whole bean coffee segment, where it enjoys the largest market share. The company historically operated as a division of The Great Atlantic and Pacific Tea Company (“A&P”) supermarkets but became an independent company in 2003 when Gryphon Investors purchased it from A&P. Over its 150-year history, the Eight O’Clock Coffee brand has developed strong, nationwide consumer recognition and loyalty and has emerged as the pre-eminent brand within the “value gourmet” segment of the coffee market, where the company enjoys a 54% share.
About Tata Coffee Ltd.
Tata Coffee Ltd. is India’s largest coffee-growing company and is a subsidiary of Tata Tea Ltd. Tata Tea Ltd. recorded sales of approximately $700 million for the year ended March 31, 2006 and is one of the fastest growing beverage companies in the world. It has acquired a number of well-known tea and coffee companies globally and, following this acquisition, will have significant scale in several key markets across Asia, Europe and North America.
About Gryphon Investors
Based in San Francisco, Gryphon Investors focuses on leveraged acquisitions of, and growth investments in, middle-market companies in partnership with experienced management. Having managed more than $1 billion of discretionary equity capital, Gryphon has an extensive track record of investing $25 to $75 million of its own capital in companies with sales ranging from $25 to $250 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, professional resources and significant financial and operational expertise. Visit www.gryphoninvestors.com for more information.
- for Gryphon and Eight O’Clock:
- Lisa Baker
- Owen Blicksilver Public Relations, Inc.