Peet's Coffee (PEET) To Acquire Diedrich Coffee (DDRX) for $26/Share

November 2, 2009 5:51 PM EST

Peet's Coffee & Tea, Inc. (NASDAQ: PEET) announced an agreement to acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) for $26.00 per share or a total value of approximately $213 million.

With this acquisition, Peet's will enter the rapidly growing single cup coffee market with strong specialty coffee brands helping to drive household penetration of the K-Cup brewer system by leveraging Peet's infrastructure and direct-store-delivery selling system. Diedrich, a wholesale coffee roaster and distributor, is almost exclusively focused on the production and sale of K-Cups(R) for Keurig Incorporated's top selling single-cup brewing system through a license with Keurig.

Peet's will finance the acquisition through a combination of cash on hand (at both companies) and $140 million of committed debt financing. The acquisition is expected to be dilutive to earnings in 2010 and accretive thereafter. The exchange offer is currently expected to close by end of the calendar year 2009.

This news could impact shares of Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR), which makes the Keurig single-cup brewing system.

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