Green Mountain Coffee acquires Tully's Coffee
Green Mountain Coffee Roasters Inc. will acquire the Tully's coffee brand and wholesales business from Tully's Coffee Corp. for $40.3 million in cash by the end of the calendar year. The move is intended to drive West Coast growth and penetration of the Keurig brand.
Tully's Coffee Corp. will remain an independent company owned by its existing shareholders and managed by its existing management team. Its focus will be on retail and international sales. The wholesale business distributes handcrafted coffees and related products via office coffee services, food service distributors and over 5,000 supermarkets located primarily in the West.
Tully's will provide Green Mountain “with a complementary West Coast brand and business infrastructure, furthering our plans to establish the company, and its proprietary Keurig Single-Cup Brewing system, throughout North America,” said Lawrence Blanford, president and CEO of Green Mountain, in a statement.
Tully's wholesale sales during the 12 months ended June 30 totaled $30.4 million, an increase of approximately 35%, Blanford said in the statement. The increase was driven by growth in supermarket distribution as well as sales of K-Cup portion packs for the Keurig system.
“This complements our own business in these channels, which is currently largely on the East Coast,” Blanford said in the statement. “Enhanced distribution of Tully's K-Cup portion packs in supermarkets and office coffee services also presents exciting opportunities. Tully's has been a Keurig licensee since November 2005. With this acquisition, we intend to further leverage the brand's potential and aggressively growth Tully's wholesale business.”
Following the completion of the transaction, Green Mountain expects to integrate approximately 70 employees from Tully's wholesale business into its Green Mountain Coffee segment.