Reuters

India's Tata Coffee to buy U.S. firm for $220 million

Jun 25, 2006

MUMBAI: India's Tata Coffee Ltd. Informed that it had agreed to buy U.S.-based Eight O' Clock Coffee Company for $220 million from private equity firm Gryphon Investors.

Tata Coffee shares surged and hit its daily limit of 20 percent, ending at 325.65 rupees in a slightly higher Mumbai market during a special trading session on 25 June 2006.

The deal will be financed through a combination of equity and non-recourse debt, the Indian plantation and coffee maker said in a statement.

New Jersey-based Eight O' Clock Coffee, is a leading player with a 54 percent market share in the branded whole bean coffee market in the United States, with sales of $109 in calendar year 2005.

This is Tata Coffee's second major acquisition in the U.S., giving it further market share in the $21 billion coffee market. It acquired Good Earth, another U.S brand in October 2005.

Other foreign companies in Tata Coffee's kitty include UK brand Tetley and Czech Republic's JEMCA.

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